Is this realistic? Certainly, if you expect a major economic slowdown.
If markets have this right — you should expect 250 basis points of cuts by the end of 2025
Is this realistic? Certainly, if you expect a major economic slowdown.
Declines in the fed funds rate this deep and protracted seldom happen without one.
As Ian Harnett of Absolute Strategy Research shows in this chart, every time the two-year Treasury yield (driven primarily by Fed expectations) has fallen this far below fed funds over the last 60 years, a recession has followed soon after
If the economy is in as bad shape as the bond market implies, you would expect corporate profits already to be under pressure, with credit defaults on the rise.
That’s not happening.
John Authers Bloomberg 12 September 2024
Det intressanta är inte när sänkningarna börjar, utan var de slutar
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