Fed Likely To Resume Rate Hikes In December As Economy's Strength Continues, Says Bank of America
Portfolio Pulse from Piero Cingari
Bank of America analysts predict the Federal Reserve will resume interest rate hikes in December 2023, backed by strong economic indicators. The bank also expects the first rate cut to occur in June 2024, with quarterly reductions of 25 basis points in the policy rate. The 10-year Treasury, as tracked by the US 10-Year Treasury Note ETF (NYSE:UTEN), is anticipated to yield 3.80% in March 2024 and 3.50% by December 2024.
October 20, 2023 | 4:04 pm
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NEUTRAL IMPACT
CME Group's FedWatch tool indicates a 25% chance of a Fed rate hike in December, contrasting with Bank of America's prediction.
The prediction by Bank of America contradicts the market sentiment as indicated by CME Group's FedWatch tool. This could lead to increased market attention on CME Group, but the impact on its stock price is uncertain.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Bank of America predicts the 10-year Treasury, tracked by the US 10-Year Treasury Note ETF (UTEN), to yield 3.80% in March 2024 and 3.50% by December 2024.
The prediction by Bank of America of a substantial fall in yields, and thus rise in value, for the 10-year Treasury tracked by UTEN, could lead to increased investor interest in this ETF, potentially driving its price up.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100