- According to Paul Gambles, managing partner at MBMG Group, the Fed is slow to cut rates.
- Traders are pricing in a 25-basis-point cut as early as March 2024.
- Veteran investor David Roche predicts that the Fed is finished raising rates and inflation will remain above 2%.
To prevent a recession, portfolio manager Paul Gambles believes that the Federal Reserve needs to cut interest rates at least five times next year.
He also states that Fed policy is out of touch and disconnected from economic reality.
Current market forecasts are already predicting a 25-basis-point cut by March 2024, according to the CME FedWatch Tool.
Federal Reserve Chairman Jerome Powell suggests that it’s too soon to declare victory over inflation, signaling a cautious approach to future interest rate decisions.
Despite easing price pressures, Powell emphasizes the need to keep policy restrictive until inflation stabilizes at 2%.
Following Powell’s comments, financial markets reacted positively, with Treasury yields declining, reflecting the perception that the Fed is unlikely to raise rates further.
Recent consumer price data have boosted hopes that the Fed’s rate hikes are curbing inflation, although veteran investor David Roche believes the next move will be a rate cut.
Roche predicts that inflation will remain around 3% and that the Fed is unlikely to push it below that level.
David Roche’s remarks highlight a shift in the approach of central banks towards inflation, indicating potential changes to future monetary policy.
The Fed’s upcoming meeting on December 13 will be crucial in understanding their approach to interest rates for the year ahead.
