Key Points:
The Federal Open Market Committee voted unanimously to cut the federal funds rate by an additional 25 basis points at their November meeting.
- Longer-term interest rates generally rose following the Fed’s initial 50 basis point cut in September as investors continue to revise their expectations for the terminal federal funds rate.
Interest Rates
Following benchmark revisions to the National Economic Accounts, labor productivity growth from 2019 was stronger than previously believed.
- Today, productivity is slightly higher than projected by the Congressional Budget Office in January 2020.
- When productivity growth is stronger, real wages can increase more quickly andthe pace of nominal wage growth consistent with 2% inflation rises.
Nonfarm Labor Productivity Trends (2020 - Present)
