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No Fed Cuts For A Year: The Hawkish Case
As you might've heard, there's considerable disagreement across major banks regarding the likely trajectory of the Fed funds rate in 2024.
UBS made waves early this week by projecting aggressive rate cuts which the bank's economists believe will be necessary to combat rising unemployment and a sharp deceleration in growth.
On the other end of the spectrum is Goldman, whose strategists and economists expect just one lonely rate cut next year and not until Q4.
Note from the figure that Goldma
If I were to oversimplify the hard work and thoughtful nuance of these talented sellsiders, and I am not being snarky at all, I’d say:
If you’re an economic pessimist, you see rate cuts sooner and deeper. If you’re an economic optimist, you see rates higher for longer. If you’re more of a pessimist, you see rates higher for longer then deep desperate cuts. If you’re more of an optimist, you see stocks bounding up on rate cuts. If you’re an incorrigible pessimist, you note that stocks historically crumble when the rate cuts start. If you’re an incorrigible optimist, you say it might be different this time.