what a journey...
Source chart: Bloomberg
Prediction markets now show a 36% chance of ZERO interest rate cuts in 2024, according to Kalshi.
To put this in perspective, 4 months ago there was a ~3% chance of no rate cuts in 2024. The base case has gone from 6 rate cuts to 1 rate cut this year. There is just a 31% chance of 2 or more interest rate cuts this year. In other words, there is a higher chance of NO cuts than 2 OR MORE cuts. Could it be the fastest shift in Fed expectations of all time? Source: The Kobeissi Letter
What a difference five months makes for the Fed rate cut outlook. 😉
Source: Bloomberg Intelligence, Markets & Mayhem
2022-2024 summarised in one cartoon
Thru Andreas Steno Larsen
The Federal Reserve's next move might be to raise interest rates warns Former Treasury Secretary Larry Summers.
Source: Barchart
Raoul Pal - Global Macro Investors (GMI) has shared this chart on X showing Global liquidity growing at a CAGR of 8%.
His view: "While everyone is worried about 3.5% inflation, the real issue is the ongoing 8% per annum debasement of currency, on top of inflation. Your hurdle rate to break even is around 12%, which is the 10-year average returns of the S&P 500...just to keep your purchasing power". Key takeaway: if you want to protect your purchasing power in a global monetary debasement, you have 3 choices: 1/ spend; 2/ invest into risk assets; 3/ invest into store of values
BREAKING: Interest rate futures are now pricing in just 2 interest rate cuts for the entire 2024.
This is the first time that markets are pricing-in LESS rate cuts than Fed guidance. Just 4 months ago, markets saw 6-8 rate cuts in 2024 with cuts beginning in March. Odds of a rate cut in June are down from ~60% before the CPI report to ~22% now. Source: The Kobeissi Letter, www.zerohedge.com
From expecting 6 Fed rate cuts to just two in 2024 😉
Source: Markets & Mayhem
