Morgan Stanley IM: A Rate Cut Named Desire
Jim Caron, CIO of the Portfolio Solutions Group, shares his macro thematic views on key market drivers.31.01.2024 | 07:45 Uhr
- The Fed meets this week with two goals in mind:
- Signal the end of their rate-hiking cycle.
- Discuss the possibility, and criteria, for when they will begin to cut rates.
- Our title is clearly a take on A Street Car Named Desire, the Tennessee Williams classic heralded as a social study on fantasy's inability to overcome reality.
- I can’t help but see the parallels with the Fed, who has a strong desire to cut interest rates, but is that merely a fantasy?
- Life is easier for the Fed if they could start cutting in March, their desire. But the reality of the economic data may stand in their way.
- So at this week's meeting, we need to see how the Fed may start to rationalize and communicate a rate cut in March to fulfill their desire.
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