Markets Back to Seeing Fewer Rate Cuts Than the Federal Reserve

For a brief moment last week, the market and the Federal Reserve were on the same page about the pace of monetary easing. It didn’t last long, and Treasuries investors are paying the price.

After spending much of this year making bets that were much more dovish than those of Fed officials, investors have now flipped in the opposite direction. They’re forecasting about 65 basis points of rate reductions in 2024, compared to the 75 basis points signaled by the median estimate of projections released following the Fed’s March 19-20 meeting.

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