Bloomberg Markets Live Pulse found that experts are largely unconfident that the Federal Reserve will introduce interest rate cuts early next year. Two-thirds of respondents to the Bloomberg survey labeled this expectation as the “most foolish” among popular trades headed into 2024.
While the S&P 500 has reached an all-time high as stock markets rally, analysts have expressed a belief that interest rates will not be cut as soon as confident investors think after several Federal Reserve policymakers issued warnings against such beliefs. San Francisco Fed President Mary Daly labeled it “premature” to expect impending rate cuts, with more data needed to show that inflation is headed toward the Fed’s 2% target.
Janet Mui, head of market analysis at RBC Brewin Dolphin, mentioned the re-acceleration of inflation in several major economies as a reason for concern. “The early start and number of rate hikes priced in was incompatible with the soft-landing view,” she observed.
