Stocks Rally at Risk if Fed Dashes Hopes for 2023 Rate Cuts
• The rally lifting U.S. stocks to fresh 2023 highs could be at risk if the Fed on Wednesday crushes expectations for interest-rate cuts in 2024.
• Traders have been flip-flopping on rate cut forecasts based on fed funds futures data amid recent volatility.
• The Dow and S&P 500 are nearing record highs, while the Nasdaq has rallied 37.6% in 2022, partly on hopes of Fed rate cuts.
• But some strategists are skeptical cuts will come as soon as markets expect given still-resilient jobs data.
• Markets may be too aggressive on betting on March cuts; second half of 2023 more likely for Fed to pivot dovish.