Posted 1/11/2024, 7:46:15 PM
Fed Unlikely to Pivot Soon Despite Market Hopes, Risking Volatility
- Markets have priced in rate cuts and quantitative tightening slowing by mid-year, taking "soft landing off the table"
- Strategist thinks market narrative has gotten ahead of itself in pricing in dovish pivot
- Fed delivering "constantly muddled" communications, unlikely to pivot as soon as March
- Lofty valuations show market priced for "Goldilocks narrative" not supported by potential for conflicting economic data
- Unlikely to "declare victory" on inflation before 2024 presidential election