Economy

FOMC Speakers talked down the odds of early rate cuts

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It’s another day of fall for global equities as traders pare down the odds of interest rate cuts. The latest economic data points to a strong economy, dampening hopes for the Fed to ease monetary policy.

🎯FOMC Speakers all out to dampen interest rate cuts hope🥁

It was a day full of FOMC speakers. According to the Cleveland Federal Reserve, President Mester spoke about the path of inflation, a bumpy ride towards the lower curve in 2024.

With an economy that is stronger than expected, it is necessary for the interest rate to remain higher for longer since inflation is now in a sideways motion. As she discussed, the route to disinflation isn’t smooth.

💰More evidence is needed before the rate cut begins💼

Her words are highly regarded, given that she is a voting member in FOMC policymaking. Similar to the echo of Uncle Powell, she reinforced the need to see more evidence to build confidence that inflation can shift down to 2% on a sustainable path to achieve the determination for the Fed to take the pedal off the interest rate.

Market participants are now pricing fewer odds of a rate cut in May, pushing it further down to June with a probability of around 60%. She expects a better 2024 economy with businesses remaining confident and consumers in good shape. While she expects the unemployment rate to tick higher, the general labour market remains perfectly in good shape.

📪What’s on the menu today? 📖

1) At 9.45 pm, FOMC member Bowman will speak. At the same time, S&P Global Composite Services PMI (Mar) will arrive.

2) The ISM Non-Manufacturing PMI (Mar) will be set at 10 pm, including the ISM Prices.

3) Uncle Powell will speak at 12.10 am, which will likely receive much focus.

It is 3 April, Wednesday, 8.55 am in Singapore and 8.55 pm in New York. The markets are giving off heat, and we are back into some hedge puts, which is eating into our portfolio gains. This has been the trend for the year, making it a difficult trading period.

Given a week full of FOMC speakers and data, we have anticipated higher volatility since last week and wish all friends of Pika World a safe trading week ahead.