Inflation Cooling but Bumpy Road Ahead for Further Progress
- Inflation is cooling but progress may be exaggerated, more slowdown needed
- Markets overreacted to Dec FOMC, pricing in too many 2023 rate cuts
- Risk of Fed cutting rates too soon in 2024 if inflation re-accelerates
- Volatile categories driving recent disinflation, expect slowdown in progress
- If Fed cuts too early they can just tighten again, not end of world