VTI - The Fed May Be Sending The Wrong Message To The Markets

2024-03-24 06:15:00 ET

Summary

• The Fed plans to cut rates three times in 2024 despite rising inflation expectations and a recent increase in inflation rates.
• Inflation swaps market predicts inflation rates of 3.4% in March and 3.2% in April and May, suggesting inflation may not decrease further.
• The Fed's forecast shows a higher neutral rate and a more robust economy, indicating that ultra-low interest rates may be behind us.

The FOMC meeting this week surprised many when it was revealed that the Fed still intended to cut rates three times in 2024. It seemed that given the back-to-back, hotter CPI inflation report to start the year and rising inflation expectations, the Fed would begin to push back against the easing of financial conditions witnessed since early November....

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