Former Treasury Secretary Lawrence H. Summers has pointed out that the terminal rate, as reflected by the Fed funds futures, has crossed the 5% mark, and this is a significant milestone. However, most of the possible increase in the current cycle has already taken place, he said.
“The terminal rate, according to Fed funds futures, has just risen above 5[%]. This is a kind of milestone. I think it is more likely than not to rise more. But the increase already of more than 400bps in 18 months is surely most of the increase we will see in this cycle,” Summers tweeted.
