UHERO blog post: There is a marked difference between what Fed officials expect about their likely interest rate cuts this year and what the financial markets expect. Based on their December meeting, the median outlook of Federal Open Market Committee members is for three quarter-point cuts this year. The recent actions of financial market participants imply that they expect six cuts, bringing the federal funds rate to the 3.75-4.00% range by year end.
Could the markets be right? Or perhaps a better way to say this: What would have to happen for the Fed to cut rates that much in 2024?