Image source: Pixabay

As expected, the Fed cut rates by 25 basis points, but the market was caught off guard by the Fed’s positioning regarding future rate cuts. Looking back, it was somewhat obvious. Earlier today, I shared a video highlighting how analysts were expecting more rate cuts than what the Fed Funds Futures and overnight swaps markets were pricing in. Historically, in my experience, the FOMC aligns more closely with Fed Funds and swaps markets than with analysts’ expectations, so the analysts seemed overly optimistic.

Video Length: 00:08:42

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