Despite recent comments from J Powell where he reiterated the “higher for longer” message, Fed funds futures are projecting #ratecuts starting on 2024. Consequently, asset classes have incorporated somehow these expectations in their valuations. Coincidentally, the Cleveland Fed is projecting an increase for August #cpi of 0.79%, which will put the YoY cpi at 3.82%. It is also projecting a September cpi increase of 0.45% which will place the annual cpi at 3.91%. There is a disconnect, again, between the #federalreserve narrative and market positioning, which will need to be adjusted. Rate cuts are consistent with a disinflationary or recessionary scenario, which is not the one the fed is managing. The next fed meeting will take place on Sept 19-20th. The next cpi report will be published next Wednesday, on Sept 13th.
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Chart source: Bianco research.
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