Relative to market expectations, the over/under is 2

With the effective fed funds rate currently at 5.33% and the December 2024 fed funds futures priced at 4.31%, the market is pricing in a 100% chance of 100 bps of cuts next year. So, outside of what Powell will tell us in his presser, which I believe will be pretty similar to what he said on December 1st, the FOMC over/under on the dot plot today relative to the 100 bps of cuts priced in is 2. I say 2 because in the September dot plot, 2 members expected a 2024 yr ending fed funds rate of between 4.25-4.5%. Of the rest, 3 saw 4.5-4.75%, 4 expected 4.75-5%, the same amount predicted 5-5.25%, 4 saw no change and the 2 that expected more rate hikes will likely pare that back. As for the mean yr ended 2024 fed funds rate, it was 4.6% in June and 5.1% in September. I expect the dot plot seen today to not confirm current market expectations. 

The last dot plot:

Ahead of the ECB, BoE, SNB and Norges Bank also having meetings tomorrow, the Brazilian Selic Rate is expected to be cut by 50 bps tonight to 11.75%. Compare this to the November inflation rate of up 4.7% y/o/y and you'll still have some big time positive REAL rates in Brazil and why we're long local currency Brazilian bonds in a few different vehicles. 

Similar to what JetBlue said a few days ago, Southwest today in an 8k is reflecting the still strong desire to travel. They said "Fourth quarter 2023 travel demand and yields continue to be healthy. Leisure demand remains strong with record revenue over the Thanksgiving holiday period. Close-in bookings, including managed business bookings, have performed at the better end of expectations in November and December-to-date. As a result, the Company now expects fourth quarter unit revenues to improve to the better end of its previous guidance range, and continues to expect record fourth quarter operating revenues and record fourth quarter passengers." The stock though is down pre market as maybe it wasn't as good as expected.