Posted on 11/28/2022 9:13:43 AM PST by Kaiser8408a
Fed Rollercoaster!
Deutsche Bank, my former employer, said that The Fed will slash rates by 200 basis points by mid-2024 after staying hawkish in the short term.
Deutsche Bank increased its view on the terminal rate and now sees it hitting 5.1% in May.
The Federal Reserve will remain hawkish in the short term but will cut benchmark rates sharply after that, according to a Monday note from Deutsche Bank.
The central bank has hiked rates by 375 basis points so far this year, with another half-point increase widely expected next month. Even more tightening will come, with analysts at Deutsche Bank increasing their view on the terminal rate, which they now see hitting 5.1% in May.
Meanwhile, the economy will slow down amid the aggressive tightening, and Deutsche Bank sees an 80% probability of a recession in the next year.
Analysts anticipate a moderate recession beginning mid-2023, with real GDP falling about 1.25 percentage points over three quarters and the unemployment rate reaching a peak of 5.5%.
“With a sharp rise in the unemployment rate and inflation showing clearer signs of progress, the Fed should cut rates by 200bps by mid-2024 when it approaches a neutral level around 3%,” analysts said. “QT should cease when the Fed cuts rates, to ensure both tools are not working in competing directions. Balance sheet drawdown could be modified or halted earlier if reserves continue to fall faster than expected.”
The first rate cut will be 50 basis points in December 2023, followed by 150 basis points of cuts into 2024, the note said.
The last Fed Dots Plot shows the next leg of The Fed Rollercoaster.
In the short term, Fed Funds Futures are pointing at another 106 basis point increase by June 2023.
Yes, its The Fed Rollercoaster!
(Excerpt) Read more at confoundedinterest.net ...
And the moon is made of green cheese.
Forgive my ignorance but are basis points tied to mortgage rates somehow?
If Deutsche Bank knows what’s going to happen in the future, they can make a ton of money trading.
But in the past five years, their results haven’t been that great.
Just in time for the next Presidential election...
A basis point is 1/100 of a percent, so they’re predicting a 2% decline in the overnight rate.
Indirectly. The fed basis points are tied to what the government loan rate is. The bank rates are influenced by this.
Even the Fed does not know what the Fed will be doing in 2024. This is the fed that thought inflation was transitory. Then it hit a 40 year high; probably an all-time high if the old measure of inflation is used. The Fed pretends to be in control, or worse, thinks it is actually in control of the economy. It’s a blind and drunk man trying to light a cigarette in a fireworks factory. The probability of success is low.
Isn’t this kind of what happened in the 1970s pre-Paul Voelker, the Fed would raise rates and the economy would slow, they would get scared and lower rates and they continued to do this multiple times, meanwhile inflation never truly went away and by the end of the 1970s you had the worst possible outcome, high inflation combined with an economic recession.
Title says by mid-2023, but article says mid-2024.
Especially if this is 2023, basically, saying fed wants a roaring economy, inflation be damned.
Exactly. And this is just some rinky-dink blogger spouting off. It’s a trash post.
Does anyone really that the FED Rothschild bank will give up any of their power structure?
They’re going to be blink. Life savings are about to be wiped out. They have decided to roll with inflation rather than price stability.
70’s was distorted by the energy increases, which amplified the inflation issue. Not much has changed today, except that the FED pimped low interest for way too long. Free money has destroyed the future.
“Zero” interest rates worked well before, so why not again? /sarc
“Analysts anticipate a moderate recession beginning mid-2023, with real GDP falling about 1.25 percentage points over three quarters and the unemployment rate reaching a peak of 5.5%.”
Analysts = retards.
lol...that cant save them. Thats why it important these busted elections are looked at seriously.
Unfortunately, we’ll be back in 1934 by then.
I have to agree with Deutsche bank. A pivot is inevitable and may be even before mid 2023. Like by March.
Headline reads:
“Fed Will Slash Rates By 200 Basis Points by Mid-2023 Says Deutsche Bank”
Story reads:
“Deutsche Bank, my former employer, said that The Fed will slash rates by 200 basis points by mid-2024”
Author Anthony B. Sanderson has reached his level of incompetence.
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