Bank of America warns that markets are going to be disappointed with their overly bullish expectations for rate cuts from the Federal Open Market Committee (FOMC):
- “… markets now pricing close to 50bp of cuts this year, they are likely to get disappointed”
- Interest rate cuts are “still a way off”
BoA roll out a slew of reasons there will be no Fed Funds cut soon:
- 1Q inflation was too high
- a single print should not deliver much comfort, especially if it annualizes to a rate much higher than consistent with the Fed’s target,
- the economy is still solid, including services spending
- the labor market remains tight
- supply tailwinds could fade
- and elections are approaching
This article was written by Eamonn Sheridan at www.forexlive.com. Source