Recently, the views expressed by U.S. Treasury Secretary Bessent have sparked widespread discussion in the financial community. Bessent claimed that the current Intrerest Rate level is more than one percentage point higher than the appropriate level. However, the interest rate strategy expert team at Deutsche Bank holds a different opinion.

A team of strategists at Deutsche Bank, led by former Federal Reserve economist Matthew Raskin, conducted an in-depth study. Their findings indicate that the models used by the Federal Reserve in its semiannual monetary policy report do not support Bessenet's claims. In fact, these models do not explicitly indicate the need for a significant interest rate cut, let alone a reduction of 150 to 175 basis points.

The Raskin team pointed out in their latest report that the current federal funds Intrerest Rate is actually within a relatively narrow range as specified by the model, approximately between 4% and 4.65%. This finding suggests that the current rate level may be quite close to the ideal state.

It is worth noting that experts from Deutsche Bank believe that if an adjustment is to be made, a modest rate cut of 25 basis points may be reasonable. This stands in stark contrast to the substantial rate cut suggested by Bessen.

This debate about the Intrerest Rate levels highlights the complexity of economic policy formulation. Different models and analyses can lead to vastly different conclusions, and these differences can have profound effects on financial markets and the overall economy.

As this debate continues, investors and economists will closely monitor the Federal Reserve's next moves. While weighing various perspectives, the Federal Reserve must also consider multiple factors such as inflation and employment to formulate the best monetary policy.