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Fed Rollercoaster! Fed Will Slash Rates By 200 Basis Points by Mid-2023 Says Deutsche Bank
Confounded Interest ^ | 11/28/2022 | Anthony B. Sanders

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 ...


TOPICS: Business/Economy; Government; Politics; Society
KEYWORDS: biden; bidenflation; blogpimp; deutschebank; economy; europeanunion; fed; federalreserve; germany; inflation; retread
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To: Kaiser8408a

Whatever happens...I can rest easy knowing with full confidence that the Fed and the US government which authorizes it, is on MY side and that of my rural, conservative, traditional neighbors.

We have no worries about any foreign or global allegiances the bureaucrats in the US government or the Fed may have that would compete with their duty to lookout for our best interest.


21 posted on 11/28/2022 11:08:25 AM PST by nitzy
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To: Kaiser8408a

slash them?

LMAO

they wont even be finished RAISING them 6 months from now!!!

it took raising them up to nearly 20% to stop inflation under Carter!


22 posted on 11/28/2022 12:17:40 PM PST by TexasFreeper2009
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To: Kaiser8408a

A guy bet me in june that next year the fed would find they raised rates too much. Forecast is 16% market gain next year. It takes 33% to get back to where we once were.

The recession is needed and I hope assured. The sooner we get this over the better. Too much free money and too little work and product crippled us.

We’ll see. Won’t we?

It goes up and it goes down and repeats.


23 posted on 11/28/2022 6:48:57 PM PST by Sequoyah101
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