Interest Rates – Market Pricing for the Number of Fed Rate Cuts Markets have sharply repriced the Fed path. Investors shouldn’t see “no rate cuts before 2027”, but they should recognize that the hurdle for 2026 easing has risen significantly. Cuts aren’t off the table, just harder to justify now. Image: The Daily Shot
Median S&P 500 Performance After Fed Cuts Rates The S&P 500 has typically rallied about 50% in the two years after the Fed begins cutting rates. But when those cuts hit during recessions, those gains often don’t last. Image: Deutsche Bank
Effective vs. Statutory U.S. Tariff Rates While statutory tariff rates have jumped following swift policy changes, the effective tariff rate—the actual rate paid on imports—lags because of delayed enforcement, stockpiling, shifting trade routes, and ongoing uncertainty. Image: J.P. Morgan Asset Management
CAPE Valuations vs. 10-Year U.S. Interest Rates Rising interest rates often have a significant impact on equity market valuations, frequently causing valuation reversals, especially for growth stocks and companies with high valuations based on future earnings expectations. Image: Real Investment Advice
Developed Market Core Inflation Rates In most major economies, inflation rates have significantly eased. While challenges remain, current trends suggest that inflationary pressures are gradually coming under control. Image: Goldman Sachs Global Investment Research
Interest Rates – Implied Fed Funds Target Rate The Fed is likely to cut rates by 25 basis points today, but projections for 2025 indicate a more gradual easing strategy, aiming to boost the economy while keeping inflation in check. Image: Bloomberg
U.S. Rates – Treasury Yield Forecasts Deutsche Bank forecasts the 10-year UST yield at 4.65% by year-end 2025, driven by potential increased tariffs, fiscal easing and deregulation, which may lead to stronger economic growth and higher inflation. Image: Deutsche Bank
Interest Rates – Expectations for the Fed’s Policy Rate Path Morgan Stanley expects more Fed rate cuts in the first half of 2025 than markets currently price in, as the impact of tariffs will likely hit the U.S. economy, despite inflationary risks. Image: Morgan Stanley Research
Interest Rates – Fed Funds Futures Curve After the Federal Reserve’s recent meeting, the slope of the fed funds futures curve has increased slightly, indicating a shift in market expectations regarding future interest rate movements. Image: The Daily Shot
Gold and U.S. 10-Year Real Rates Gold prices typically exhibit an inverse relationship with U.S. real interest rates, as investors often shift their holdings between gold and interest-bearing assets based on the opportunity cost of owning the precious metal. Image: Gavekal, Macrobond
CTA Positioning in U.S. Rates While CTAs’ current long positions in U.S. rates reflect a bullish outlook, they also serve as a potential contrarian indicator for savvy investors looking to capitalize on market reversals. Image: Deutsche Bank