Attention Economy


Monday, November 27, 2023

Fed Pivot: Will This Time be Different?

Investors See Interest-Rate Cuts Coming Soon, Recession or Not
https://www.wsj.com/finance/investing/investors-see-interest-rate-cuts-coming-soon-recession-or-not-d30646c9
Recent data has fueled bets that cuts could come under a variety of circumstances
 
 
The stock market incorrectly priced in dovish Fed pivots 6 times in the last few years. Will this 7th time be any different?
https://markets.businessinsider.com/news/stocks/stock-market-outlook-fed-rate-cuts-inflation-recession-bond-yields-2023-11
Related:
https://www.morningstar.com/news/marketwatch/20231116351/seventh-time-a-charm-here-are-the-other-six-times-the-market-wrongly-thought-thered-be-a-dovish-pivot 

My take from August 2022:
Are investors right in expecting a dovish Fed pivot?
https://thehill.com/opinion/finance/3582559-are-investors-right-in-expecting-a-dovish-fed-pivot/
If investors are indeed misreading the Fed’s commitment to maintaining a tight policy for a prolonged period and are failing to adequately take into account future inflation risks, then recent stock and bond market rallies may well prove to be premature and even counterproductive.