Chart of the Week
The bond market and the Fed agree.
As both attempt to forecast the likely path of interest rate cuts, the rest of 2024 and 2025 line up nicely.
Both see 0.75% of interest rate cuts for the rest of this year and 2025. This would move the Fed Funds rate from its top end level of 5.5% today to 4.0% in December of 2025.
Of course, any number of data points or events could change this path. This is the base case as we look ahead. The chart below shows the orange and magenta lines start to diverge in 2026. The market expects a steadier policy rate while the Fed sees a few more potential cuts.
What We’re Reading
Views from the Floor – Beyond Nvidia: Lessons from the Mobile Era – Man Institute
Have Corporate Reforms in Japan Unlocked Shareholder Value? – MSCI
Electravision: The Complicated Journey to an Electrified Future – JPMorgan
US Regulators are Scrambling to Catch Up with the Boom in these Charitable Giving Accounts – The Conversation
Podcast of the Week
The Big Can Kick in Commercial Real Estate – Odd Lots, Bloomberg
Last Week
Economic reports were mixed last week. On the good side, initial jobless claims, manufacturing, durable goods, and home sales were better than expected. On the negative side, services and consumer confidence were lower than estimates.
The Week Ahead
The stock market is closed on Friday in observance of Good Friday, though we still get data on the closely followed price index for consumer expenditures. The first week of April sees many economic activity surveys reported with the payrolls report to cap off the week. Economists expect the unemployment rate to remain steady at 3.9% with another 200,000 jobs added.
Thank you for reading.
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