In a year dominated by worries about inflation and rising interest rates, strategists and traders said a narrative is building within financial markets in which the Federal Reserve will likely need to back off aggressive interest rate hikes soon.While such a possibility isn’t entirely new, it’s suddenly gained greater credence in just the past few days. On Wednesday, the Bank of Canada delivered a smaller-than-expected, half-percentage-point hike.
Even as fed-funds futures traders still clung to an 88.5% chance of a 75-basis-point hike next Wednesday, which would lift the fed funds rate target to between 3.75% and 4%, there was a sense that policy makers might be approaching the end of the road with “how much tightening they can actually do,” said Tom di Galoma, managing director of rates trading at Seaport Global Holdings in Greenwich, Conn.
“People are talking about more signs of peak inflation having hit, which is why Treasurys are rallying,” which produces lower yields, “and the implied terminal rate has moved back in from 5% to 4.8%,” said Scott Buchta, the Franklin, Tenn.-based head of fixed-income strategy for Brean Capital.
They might back off but the real effect of the hikes hasn't even got the economy yet.
This isn’t aggressive
“a narrative”
That is not the face of a man about to take his foot off that gas
Not until inflation significantly slows. And it hasn't slowed at all yet. Maybe, maybe mid 2024. Anything sooner won't be realistic.
Be careful. Good news has been bad news as of late 📉📉📉📉📉
This is how MSM are in La-La Land! Hopelessness awaits after REALITY hit them squared on the face! $ES_F forex macro