The 'over' won and while Fed is confirming market pricing, market is taking it even further

Well, if you took the over (was 2 that I set it at as that was what the September dot plot had) on the dot plot of those who would confirm the fed funds futures pricing in 4 rate cuts in 2024, you won. Now four estimate a fed funds rate of 4.25-4.5% next year and we even have one that thinks it could be as low as 3.75-4.0%. The group is coalescing around a 4.5-4.75% median fed funds rate in 2024 from 5.1% seen in September as 6 members are here. Five believe it will be 4.75-5%, one says one cut and two believe the fed funds rate will remain as is.

As there really was no change in GDP forecasts for 2024 as the estimate was 1.4% instead of 1.5% seen previously and the unemployment rate expectation was left unchanged at 2.4%, it was the core rate PCE median estimate of 2.4% from 2.6% in September that was the reason.

With the statement, after highlighting the strong GDP gain in Q3, “Recent indicators suggest that growth of economic activity has slowed.” They repeated that “job gains have moderated” and added “eased” when referring to inflation saying “Inflation has eased over the past year but remains elevated.” Everything else was pretty much identical to the September meeting.