Traders Lose Faith In March Fed Rate Cut, But Still Bet On 6 By Year-End
Portfolio Pulse from Piero Cingari
Traders have reduced expectations for a March Fed rate cut, with a 58% chance of rates staying the same, but still anticipate six rate cuts by December 2024. Strong economic data, including job growth and retail sales, have dampened immediate rate cut prospects. However, Fed futures suggest an 85% chance of a cut by May and similar odds for June. U.S. stock ETFs like SPY, DIA, and QQQ are trading at all-time highs, buoyed by these rate cut expectations.
January 22, 2024 | 9:00 pm
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POSITIVE IMPACT
DIA has reached new highs, propelled by the same market sentiment expecting multiple Fed rate cuts by the end of 2024.
The SPDR Dow Jones Industrial Average (DIA) is experiencing an uptrend, likely to continue in the short term, as the market prices in the likelihood of future rate cuts, despite recent strong economic performance.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
QQQ is at all-time highs, reflecting the market's optimism for future rate cuts, even as current economic data remains strong.
The Invesco QQQ Trust (QQQ) is likely to maintain its upward momentum in the short term, as the market's anticipation of future rate cuts seems to outweigh the impact of current strong economic indicators.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
SPY is trading at all-time highs, influenced by the market's anticipation of future Fed rate cuts despite strong economic data.
The SPDR S&P 500 ETF Trust (SPY) is likely to be positively impacted in the short term as traders' expectations of rate cuts by the end of 2024 could continue to fuel optimism in the stock market.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80