首页 Stocks Forefront 正文

Wall Street economists warn! The market is almost wrong about the future of the Fed.

海角七号
306 0 0
Torsten Slok, Associate and Chief Economist of Apollolio, expressed reservations about the Fed's expected interest rate reduction in 2024.
The Wall Street economist warned investors before next week's Fed meeting not to be too excited about the prospect of a fall in interest rates next year.
Market perceptions of what the Fed might do in the months and even years ahead are often inaccurate and sometimes very different. While traders may have some idea of what the Fed might do at its next meeting, since then market perceptions have been mostly speculative.
In the latest notice shared with clients on Friday, Torsten Slok compared futures market pricing of changes in the Federal Reserve policy interest rate to changes in real federal fund interest rates.
Sometimes, the market has made the right judgement at least in the right direction, but in the past 15 years the expectations of traders have been far less achieved than the number of proven errors.
For example, investors were right to expect the Fed to start raising interest rates in 2014. At that time, Janet Yellen, the then President and current United States Treasury Secretary, had raised borrowing costs for the first time since the 2008 financial crisis. At first, however, investors expected the Fed's actions to be more radical than the eventual reality.
During the period 2009-2014, traders repeatedly saw their expectations for a rapid return to normal monetary policy dashed, as the Federal Reserve maintained interest rates at zero points longer than most expected.
Ultimately, the Fed decided to raise interest rates more slowly and cautiously than many traders expected. This text refers to the period during which traders expect the Fed to raise interest rates to normal levels more quickly, but in fact the Fed has acted more slowly and cautiously than they expected.
In the summer of 2019, when the Federal Reserve, led by Powell, began to lower interest rates for the first time since the financial crisis, traders again proved wrong. On this occasion, traders did not anticipate the rate of interest rate decline, despite the important role played by the COVID-19 pandemic.
Since March 2022, when the Fed began to raise interest rates again, the market has not been able to anticipate the rate and magnitude of the increase, and traders have been waiting for a “change” in the Fed’s policy, but have been repeatedly disappointed.
Torsten Slok indicated that, after a reduction in interest rates is expected to start around the middle of next year, traders may again be disappointed, given the Fed ' s insistence that it plans to maintain higher interest rates over a longer period of time to moderate inflation.
While traders are once again betting on the Fed’s turn, the Central Bank’s most recent interest-point forecast line summary shows that senior officials expect to maintain policy interest rates above 5 per cent by 2025.
Torsten Slok states: “When interest rates are lower, the market will systematically price the Fed's interest rate will soon rise. When interest rates are high, the next step for the Fed to be systematically priced is to lower interest rates.
Torsten Slok added: “Maybe the Fed will drop interest rates next summer, perhaps not. At present, investors should be prepared to face higher interest rates over the long term.”
The Fed will announce after its two-day policy meeting in November (i.e. on 1 November) whether interest rates will be raised or maintained. According to the Fed Watch tool, Federal Fund futures traders generally expect the Fed to maintain interest rates as high as 99.5 per cent next week.
CandyLake.com 系信息发布平台,仅提供信息存储空间服务。
声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
您需要登录后才可以回帖 登录 | 立即注册

本版积分规则

  •   知名做空机构香橼研究(Citron Research)周四(11月21日)在社交媒体平台X上发布消息称,该公司已决定做空“比特币大户”微策略(Microstrategy)这家公司,并认为该公司已经将自己变身成为一家比特币投资基金 ...
    caffycat
    昨天 11:18
    支持
    反对
    回复
    收藏
  •   每经AI快讯,11月20日,文远知行宣布旗下自动驾驶环卫车S6与无人扫路机S1分别在新加坡滨海湾海岸大道与滨海艺术中心正式投入运营。据介绍,这是新加坡首个商业化运营的自动驾驶环卫项目。 ...
    star8699
    3 天前
    支持
    反对
    回复
    收藏
  •   上证报中国证券网讯(记者王子霖)11月20日,斗鱼发布2024年第三季度未经审计的财务报告。本季度斗鱼依托丰富的游戏内容生态,充分发挥主播资源和新业务潜力,持续为用户提供高质量的直播内容及游戏服务,进一步 ...
    goodfriendboy
    3 天前
    支持
    反对
    回复
    收藏
  •   人民网北京11月22日电 (记者栗翘楚、任妍)2024广州车展,在新能源汽车占据“半壁江山”的同时,正加速向智能网联新能源汽车全面过渡,随着“端到端”成为新宠,智能驾驶解决方案成为本届广州车展各大车企竞 ...
    3233340
    昨天 17:06
    支持
    反对
    回复
    收藏
海角七号 注册会员
  • 粉丝

    0

  • 关注

    1

  • 主题

    29