The bond market is aggressively pricing in a Federal Reserve easing cycle that would see two interest rate cuts by the end of this year, pushing the Fed Funds Rate below 4%.
But while markets celebrate the prospect of cheaper money, Creative Planning’s chief investment officer is urging extreme caution, stating that when it comes to long-term predictions, Fed officials “don’t know any better than my seven-year-old.”
September May Definitely See Interest Rate Easing
The market’s bullish expectations, amplified by recent comments from Fed Chair Jerome Powell, anticipate a significant policy pivot.
According to an analysis of Fed Funds Futures by Charlie Bilello, Chief Market Strategist at Creative Planning, traders are betting on a near-certain rate cut in September, followed by another before the year is out.