The Federal Reserve will likely take a pause following its easing of the federal funds rate to 2% from 2.25%. Its cumulative easing since the start of the financial crisis is now 3.25%. "The central bank will probably take its time to judge the effects of the cuts and the impact of the stimulus package," says Marie-Pierre Ripert, economist at Natixis. Our surveyed economists see the federal funds rate at 1.50% by fall with a 25bp easing in July.

In spite a stabilisation of the fed funds in the months ahead, the easing cycle remains intact. "The easing is far from over as the real estate picture continues to darken," says Ethan Harris, economist at Lehman Brothers. "Consumer confidence is in negative territory and the March employment report indicates a loss of 80,000 jobs (revised) for the first three months of the year." The table below contains the full forecasts of our economists.

Consensus May 08