{"id":1450944,"date":"2024-01-16T16:24:22","date_gmt":"2024-01-16T21:24:22","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1450944"},"modified":"2024-01-16T16:24:22","modified_gmt":"2024-01-16T21:24:22","slug":"stocks-bonds-tumble-after-feds-waller-sends-rate-cut-odds-reeling","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/stocks-bonds-tumble-after-feds-waller-sends-rate-cut-odds-reeling\/1450944\/","title":{"rendered":"Stocks & Bonds Tumble After Fed’s Waller Sends Rate-Cut Odds Reeling"},"content":{"rendered":"

Stocks & Bonds Tumble After Fed’s Waller Sends Rate-Cut Odds Reeling<\/span><\/p>\n

\n

At first glance, Fed Governor\u00a0Chris Waller’s comments were more of the same – data-dependent, mini-mission-accomplished, be careful of easing financial conditions, and the market seems over-enthusiastic about 2024 policy.<\/p>\n

But it was the level of detail he added that colored the market’s perceptions hawkish <\/strong>(full speech here).<\/a><\/p>\n

Data-Dependent…<\/p>\n

\u201cI am becoming more confident that we are within striking distance of achieving a sustainable level of 2% PCE inflation,\u201d Waller said in prepared remarks at a virtual event hosted by the Brookings Institution on Tuesday.<\/em><\/p>\n

\u201cAs long as inflation doesn\u2019t rebound and stay elevated, I believe the FOMC will be able to lower the target range for the federal funds rate this year.\u201d<\/em><\/strong><\/p>\n

But, Waller reiterated his support for three cuts… not six like the market wants…<\/p>\n

“This view is consistent with the FOMC’s economic projections in December, in which the median projection was three 25-basis-point cuts in 2024<\/strong>“.<\/em><\/p>\n

And certainly does not see the need for aggressive cuts priced into the market:<\/p>\n

\u201cWhen the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,\u201d <\/strong>he said.<\/em><\/p>\n

\u201cWith economic activity and labor markets in good shape and inflation coming down gradually to 2%, I see no reason to move as quickly or cut as rapidly as in the past.<\/strong>\u201d<\/em><\/p>\n

He reiterated that the timing of cuts and the actual number \u201cwill depend on the incoming data”, specifically calling out the surprising strength in the December jobs report as \u201clargely noise\u201d <\/strong>against a trend of ongoing moderation. He noted a number of 2023 job reports have been revised lower, and \u201cthere is a good chance December will be revised down.\u201d<\/p>\n

Finally, Waller made it clear The Fed is in no hurry to act:<\/p>\n

\u201cI believe policy is set properly,\u201d <\/strong>he said. \u00a0<\/em><\/p>\n

\u201cIt is restrictive and should continue to put downward pressure on demand to allow us to continue to see moderate inflation readings.\u201d<\/em><\/p>\n

All of which sent March rate-cut odds reeling…<\/p>\n

<\/a><\/p>\n

And 2024 rate-cut expectations fell, after last week’s CPI and PPI driven increases…<\/p>\n

<\/a><\/p>\n

Sparked equity market selling…<\/p>\n

<\/a><\/p>\n

And bond yields spiked, extending the earlier move…<\/p>\n

<\/a><\/p>\n

It appears the message from Fed Speakers is getting through to the market slowly – don’t expect more than six cuts this year and don’t count on a March cut…<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 01\/16\/2024 – 11:24<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Stocks & Bonds Tumble After Fed’s Waller Sends Rate-Cut Odds Reeling At first glance, Fed Governor\u00a0Chris Waller’s comments were more of the same – data-dependent,…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1450944","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1450944"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450944\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1450944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1450944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1450944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}