Has a default cycle started?
Source: Game of Trades, Apollo
It's official, higher for longer is back! For the first time this year, markets are now pricing-in just 4 interest rate cuts in 2024.
Just 6 weeks ago, markets were expecting 6 interest rate cuts in 2024. More importantly, the timing of the first rate cut has been pushed all the way back to June 2024. There is now only a 9% chance of rate cuts beginning in March 2024, down from 90% just 6 weeks ago. There is also a ~63% chance that interest rates are unchanged through May 2024. Rate cuts are all but guaranteed. Source: The Kobeissi Letter
Has the fed won the party?
US Medium-Term Inflation Expectations Lowest in 11 Years of Data – Source: Bloomberg
Another wave of early retirements is hitting as the stock market surges
This complicates the Fed's goals for the labor market to some degree, as it means there are more exiting the workforce. There's already 1.45 jobs available for every unemployed person seeking work. Source: Bloomberg, Markets & Mayhem
Four rate cuts are now priced in for 2024 (red), the LEAST number of cuts YTD.
This is down from seven rate hikes on January 12 (green), the MOST number of cuts (YTD). Source: Bianco Research
Here's the current expectation on Wall Street regarding the actions of the US Federal Reserve in 2024.
source : wsj, ntimiraos
A nice summary of Fed officials speeches since January 31st decision
Source: Bloomberg
Something to keep in mind...
Source. Michel A.Arouet
