Fed Funds Rate and Fed Funds Futures

Fed Funds Rate and Fed Funds Futures Deutsche Bank’s forecast for the Fed funds rate is more hawkish than many mainstream projections, expecting a single 2024 rate cut at the December FOMC meeting, followed by modest reductions in 2025. Image: Deutsche Bank

Money Market Fund Assets vs. Fed Funds Target Rate

Money Market Fund Assets vs. Fed Funds Target Rate Money market funds often experience outflows 12 months after the initial rate cut. This occurs as investors reallocate their investments and adjust their risk exposure in response to fluctuations in interest rates and market conditions. Image: BofA Global Fund Manager Survey

Interest Rates – Fed Funds Rate

Interest Rates – Fed Funds Rate Goldman Sachs now expects the Fed to implement three rate cuts in 2024, down from its earlier projection of four rate cuts, in response to elevated inflation data and evolving economic conditions. Image: Goldman Sachs Global Investment Research

Sentiment/VIX Composite vs. Fed Funds

Sentiment/VIX Composite vs. Fed Funds During a rate hiking campaign, bullish sentiment tends to increase initially, but ultimately ends badly. Image: Real Investment Advice

Market-Implied Path of the Fed Funds Rate

Market-Implied Change in Fed Funds Rate The market has significantly reduced its pricing of Fed rate cuts, indicating a change in expectations regarding future monetary policy. Image: Goldman Sachs Global Investment Research

U.S. Fed Funds Target Rate

U.S. Fed Funds Target Rate Historically, there have been many instances where interest rate cuts have coincided with significant financial events and have had an impact on the U.S. stock market and the broader economy. Image: BofA Global Investment Strategy

Current Market Pricing for Fed Funds Rate

Current Market Pricing for Fed Funds Rate As inflation cools down, the market is still anticipating significant interest rate cuts in 2024. Image: BofA Global Investment Strategy

Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator)

Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator) The 2-year U.S. Treasury yield below the fed funds rate indicates that the Fed’s monetary policy is currently restrictive, which could potentially lead to a slowdown in economic growth. Image: Morgan Stanley Research

Fed Funds Rate and Dow Jones Index

Fed Funds Rate and Dow Jones Index In the same way as it was in the 1970s, it’s all about the Federal Reserve. Image: BofA Global Investment Strategy