US: Interest rates should stay around 5% for longer — even as inflation falls, top economist Jim O'Neill says

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Veteran economist Jim O’Neill says central banks will need to keep interest rates up around 5% across major economies for longer than the market expects, even as inflation subsides. The U.S. Federal Reserve is broadly expected to raise interest rates by another 25 basis points at its next policy meeting in September, but market pricing suggests that the central bank will begin cutting in 2024, according to the CME Group’s FedWatch tool. Traders will be closely watching the U.S. consumer price index reading later for July on Thursday for indications on the Fed’s future rate trajectory. Economists expect the Thursday headline CPI to come in at 0.2% month-on-month and 3.3% annually, according to a Dow Jo