This – Not Inflation – Will Drive The FED To Cut Rates
Inflation, while important, is not what will drive the FED to cut rates, moderate QT and continue to invent back door forms of QE.(money creation) This week’s meeting may only bring a policy statement and some possible tweaks to it’s wording, but the ending of the BTFP, the balancce sheet and the treasury refunding schedule will all add to the necessity for rate cuts. The thing that many market analysts and commentators miss when they say that the markets are wrong about 6 cuts in 2024 because there aren’t enough meetings if the FED doesn’t cut in the first quarter is the FED is unlikely to cut by 1/4 point increments over six meetings. When the FED pivots and starts cutting it is because of a pending recession and or problems in the plumbing of the money markets. When they cut it is aggressive and in 1/2 or larger increments. https://www.zerohedge.com/markets/treasury-refunding-has-more-market-moving-potential-fed