Fed expectations

In the chart below you can see how the #federalreserve has changed its view of key economic variables for the end of the current year. It’s significantly different from market consensus in that they see fed funds slightly lower than the current ones, with stickier core #cpi, in fact higher than today, lower #unemployment and slightly higher #gdp. The main difference with the market consensus view is that the fed doesn’t see a hard landing, but because it sees a stickier inflation, rates will be higher for longer. The market however, thinks that inflation will recede, and higher rates will need to come down because it will affect growth and unemployment. Consensus also believe the fed will need to maintain the liquidty programs for the banking system, #btfp and the discount window, and that liquidity is maintaining risky assets, particularly equity and more specifically technology, on the spot light.