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Rate expectations

Markets keep pushing the Fed into #ratecuts in 2024. With just a couple of days of trading left for the year, the futures markets are pricing 6 rate cuts in 2024 and pointing towards 7 cuts. To put that in perspective, the FOMC calendar for 2024 shows there will be 8 official meetings where policy will be discused (there can be emergency meetings as well). That would mean a 25 bps cuts in every meeting except one, probably in January, since it’s the first one and it may be tougher to justify it. The next one is scheduled for March 20th, and the Fed will have 3 additional data points on inflation and unemployment, to assess the need of policy adjustments. If they don’t act, markets will be disappointed, and may adjust valuations accordingly.


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Source: Bianco Research



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