The agency additionally now expects the Fed to ship simply 75 bps of fee cuts this 12 months, versus the 100 bps of their earlier forecast. On the change: “Given the upside surprises to both payrolls and inflation, we now expect the Fed to wait a bit longer before cutting rates, making its first 25 bps cut in June rather than in May”.
This matches with market expectations, with a June fee reduce now totally priced in. In the meantime, odds of a Might fee reduce are solely seen at ~39% now. Right here is Adam’s publish earlier this week: The Fed and markets are in a rare moment of alignment
