Markets Bet on Faster Pivot to Rate Cuts as Inflation Cools Faster Than Expected
• Markets are pricing in over 100 basis points of rate cuts from the Fed and ECB in 2024 as evidence grows that inflation is easing quickly • Euro zone inflation dropped sharply in November, challenging the ECB's view of stubborn inflation • Comments from Fed's Christopher Waller and others show some policymakers willing to talk about 2024 rate cuts • Analysts forecast central banks may pivot more quickly on rates as weak data suggests policy may be too tight • Traders now fully price in ECB rate cut in April 2024; a month ago they expected first cut in July