Posted 12/13/2023, 6:31:09 PM
Markets Bet on Fed Rate Cuts Ahead Despite Persistent Inflation
- Wall Street awaits Fed decision on rates and outlook, markets positioned for dovish signals like rate cuts in 2023-2024
- Recent data shows inflation slowing but still elevated, reinforcing soft landing narrative
- Markets expect about 125 bps of rate cuts in 2023-2024, but Fed may push back against overly dovish expectations
- Stocks near highs, bonds rallied, signaling confidence Fed will confirm easing cycle ahead
- Even slightly hawkish signals from Fed could prompt market pullback given stretched valuations