Deutsche Bank: Beshent's Interest Rate Cut View Contradicts Fed Model

　　Xinhua Finance Beijing, August 20 - Deutsche Bank interest rate strategists stated that US Treasury Secretary Beshent's view that the Federal Reserve's interest rate is more than one percentage point higher than the appropriate level indicated by models is incorrect.

　　Beshent previously claimed that "no matter what model" suggests the interest rate "should be 150 to 175 basis points lower." However, since then, searches for models supporting this statement have been unsuccessful, and a team of Deutsche Bank strategists led by Matthew Raskin recently joined this verification effort.

　　Raskin, a former Federal Reserve economist and advisor, and his team stated in a report on Tuesday that the rules used by the Fed in its semi-annual monetary policy report "do not clearly indicate that interest rates should be cut, let alone by 150 to 175 basis points."

　　They added: "It should be noted that the current federal funds rate is precisely within the relatively narrow range specified by the rules," roughly between 4% and 4.65%, suggesting that a 25 basis point rate cut "might be reasonable."