LQD - Peak Rates Were Here All Along Powell Just Confirmed It
2024-03-20 23:24:17 ET
Summary
- The Fed's Jerome Powell indicates that there will be three rate cuts this year, and strong economic data may not halt the cuts.
- Long bondholders are likely to see yields temper and prices rise in the coming months.
- Powell expresses confidence in the Fed's ability to curb inflation and emphasizes the importance of the labor market in rate guidance.
- This article analyzes the Fed's stance and its impact on the bond market, including potential investments in bond funds.
Introduction
The Fed's Jerome Powell spoke on Wednesday, releasing the March FOMC summary, which can be found here .
At the press conference that followed, the opening statement of which can be found here , Powell made several points very clear:
- We are indeed at peak rates (something I called back in December )
- There are three projected rate cuts this year
- Strong economic data may not halt the cuts