Rate cuts are now the expectation as fed balance sheet grows

Please fol­low and like us:
Pin Share

Quick Take

  • The out­look from mar­kets has com­plete­ly changed in the past few weeks due to bank­ing fail­ures in the US and EU.
  • The mar­ket is now pric­ing in no more rate hikes but sub­stan­tial cuts, end­ing 2023 around 3.75–4%.
  • Four cuts are priced into the rest of the year, while the mar­ket sug­gests a greater than 90% chance the Fed is done rais­ing rates.
  • The fed bal­ance sheet has grown for the past two con­sec­u­tive weeks; rough­ly $100 bil­lion was added to the bal­ance sheet this week.
  • While two-thirds of quan­ti­ta­tive tight­en­ing have been undone in a mat­ter of weeks.
  • This is the third biggest per­cent change to the fed bal­ance sheet, only being beat­en by covid and 2008.
Meeting Probabilities: (Source: CME)
Meet­ing Prob­a­bil­i­ties: (Source: CME)
Total Assets percent change: (Source: FRED)
Total Assets per­cent change: (Source: FRED)

The post Rate cuts are now the expec­ta­tion as fed bal­ance sheet grows appeared first on Cryp­toSlate.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *