The market is almost always wrong about what the Fed will do next, Wall Street economist warns

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Take those 2024 rate cut expectations with a gain of salt, says Apollo’s Torsten Slok

One Wall Street economist has a reminder for investors ahead of next week’s Federal Reserve meeting: don’t get too excited about the prospect of interest-rate cuts next year.

Sometimes, the market at least gets the directional move right, but traders expectations have been dashed far more often than they have been proven right over the past 15 years. Ultimately, the Fed opted to interest raise rates much more slowly and carefully than many traders had expected. After penciling in cuts to begin around the middle of next year, traders risk being disappointed once again, Slok said, given the Fed’s insistence that it plans to keep interest rates higher for longer to quell inflation.

 

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