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Changes to the #FederalReserve’s “dot plot” led to a visceral market reaction last week. Kristina Hooper shares her perspectives on the impact of #centralbanks, including her view that the market is likely to stay rather volatile in the short run as any better-than-expected US economic data could magnify the market’s fears of a higher fed funds rate in 2024. https://inves.co/48J52sv

Changes to the #FederalReserve’s “dot plot” led to a visceral market reaction last week. Kristina Hooper shares her perspectives on the impact of #centralbanks, including her view that the market is likely to stay rather volatile in the short run as any better-than-expected US economic data could magnify the market’s fears of a higher fed funds rate in 2024. https://inves.co/3t3vHzA

Q2 Recap and 3rd Quarter Outlook: Investors focus on the Federal Reserve and look ahead to the remainder of 2024.    The topic of interest rate cuts continues to dominate the financial markets. Investors are focused on when the Federal Reserve will lower rates, all while keeping a close eye on corporate earnings and valuations. Economists are analyzing inflation and labor market data to determine their impact on the probability and timing of rate cuts. Speeches by Fed members and minutes of recent Fed meetings have received greater scrutiny as investors search for clues about the central bank’s next steps.    Access the full outlook here: https://lnkd.in/gskYj575

Click the link below to read the 2Q 2024 Recap & 3Q 2024 Outlook Blog Post. https://bit.ly/3VHCbPq The topic of interest rate cuts continues to dominate the financial markets. Investors are focused on when the Federal Reserve will lower rates, all while keeping a close eye on corporate earnings and valuations. Economists are analyzing inflation and labor market data to determine their impact on the probability and timing of rate cuts. Speeches by Fed members and minutes of recent Fed meetings have received greater scrutiny as investors search for clues about the central bank’s next steps. This blog post recaps the second quarter, discusses investors’ focus on the Federal Reserve, and looks ahead to the remainder of 2024.

Dating back to 2008 the Fed was placed in a damned if you do damned if you don’t situation. They didn’t ask for it and they didn’t want it but nevertheless one they were forced to deal with. The primary at risk the US economy has faced since 2008 has been disinflation not inflation. For the Fed in 2008 it became a choice of the lesser of two evils. One that would serve wealthier individuals the owners of housing and asset portfolios, while the other would better suit lower income demographic groups. On the one hand they could elect to take a road never before travelled in the US and introduce QE and a prolonged subdued lending rate environment. One from which they knew full well there would be no escape from. This decision would inevitably blow up the asset markets including the housing sector while disenfranchising lower socioeconomic groups. This option would be inflationary in nature, and most importantly have the effect of kicking the disinflationary can down the road. The other road or option if you will was one that was a much more familiar way to travel. To simply maintain the same type of monetary policy they had deployed from 1971 to 2008. Here the fallout being a cyclical recession from which there would be no escape. This choice would usher in an era of national disinflation. One that would place the US at risk of a depression. That was a futile choice and one they wisely choose to walk away from. The evacuation of the US manufacturing sector beginning in earnest in the early 2000s to 3rd world non-unionized nations has been highly advantageous to the consumer. However, it has also left its scar on the nations ability to maintain and grow GDP. Today, over 85% of US GDP is driven by consumer spending not productivity. That type of economic landscape demands both low interest rates and the constant injection of new money to maintain liquidity. This was the trigger point for QE and ultra-low interest rate policy.

🤔 It’s intriguing to see how November’s rally in financial markets mirrored the effect of substantial Fed rate cuts. This presents an interesting dynamic in understanding the possible interplay between market conditions and monetary policy. Do you think this indirect ‘easing’ by the market will impact the Fed’s future policy decisions, especially in the context of balancing growth and inflation? #FinancialMarkets #MonetaryPolicy #economicinsights

Yahoo Finance | Nicole Goodkind for CNN Business Goldman Sachs "[O]ur inflation path for the rest of the year is now in a range where small surprises could have large consequences.” https://lnkd.in/dinqs4xc #inflation #dotplot #federalreserve #fed #interestrates #ratecuts #onrrp #volatility #stockmarkets #investments #centralbanks

In his latest #FixedIncome market commentary, Stuart Dear tells us why the moves of November are not a surprise, yet the likelihood of a mild recession is high, albeit with a wide range of possibilities. Read it here: https://okt.to/kcPQy1 #Schroders #Investing

Financial markets are in a period of uncertainty. Central bankers are unsure whether they’ve done enough – or not enough – to get inflation back to their 2 to 3 percent target band. Economists and market commentators have now danced from the “hard landing” scenario which seemed certain earlier in the year to the “soft landing” scenario in July and are now waltzing into the “could be hard or could be soft” scenario. Without any clear guidance, markets are just dancing in the dark… #financeandeconomy #stockmarkets #financialadvisor #marketcommentary #interestrates