Rogoff's message to the Fed in Davos: A pipe dream

Harvard University Professor Kenneth Rogoff shared his expectations for the Fed in Davos. Rogoff also said that the recent geopolitical developments were 'the worst he has seen in his career.' Harvard University Professor Kenneth Rogoff spoke to Bloomberg at the Davos Summit. Rogoff said that unless there is a recession in the economy, expecting the Fed to cut interest rates 6 times this year as expected by the markets is a 'pipe dream.' Rogoff said, "If there is a soft landing, 6 cuts would be a dream. There would be 2 or 3 cuts. If there is a deep recession - which is possible - then I don't know how it will happen, but there will be a lot of interest rate cuts. It could be 15 cuts, not 6." Rogoff said that he did not agree with the view that 2024 would be a good year in a period when many things were going wrong. IMF officials speaking in Davos shared the view that the world economy would not enter a recession. Sharing his expectations for 2024, Rogoff said, "We seem to have reached a consensus on this issue in Davos. However, I think 2024 will not be as good as 2023 for the US, nor will it be very bad. Inflation will decrease and there will be a soft landing." Rogoff stated that geopolitical developments are "the worst he has seen in his career" and that developments have increased expectations such as inflation and market volatility. "We are in the 2nd Cold War period," said Rogoff, "There may be a hotter Cold War than the previous one. Think about what the 70s were like, it was destabilizing. 2024 may be a good year, but these tensions are worrying."