FOMC preview – a 25% to 30% chance of the Fed signaling only two rate cuts in 2024

Rick Rieder, chief investment officer of global fixed income and head of the global allocation investment team at BlackRock, the world’s largest asset manager, spoke in a phone interview with Dow Jones / Market Watch.

On the upcoming Federal Open Market Committee (FOMC) statement due later Wednesday:

  • “I still think Powell is going to suggest that they can still move, and give some sense that June is a likely time frame to start,”
  • Powell (is) … “so far from equilibrium,” or a normalized rate, after tightening monetary policy to battle inflation.
  • Projections for only two rate cuts in 2024 could lead to a knee-jerk reaction of disappointment in markets, according to Rieder, who estimated a 25% to 30% chance of the Fed signaling such a forecast.
  • Rieder said he’s also keeping “a keen eye” on what the summary of economic projections will show about the longer-run fed-funds rate, which has been estimated at 2.5% in past forecasts. “There is a reasonable chance that notches higher,” he said, which would “signal higher interest rates for a longer period of time.”

Bolding above is mine.

More at that link.


This article was written by Eamonn Sheridan at Source