Financial markets have entered 2024 with a spike in interest rates as central banks have rejected expectations of near-term rate cuts. Economists at Nordea keep their baseline forecasts virtually unchanged, but see risks of the ECB bringing forward the cuts and the Federal Reserve delaying them.
Is the Fed about to cut or not?
For the moment, we keep our baseline financial forecasts practically unchanged, as we believe that recent developments do not justify further changes.
We continue to forecast 100 basis points of Fed cuts this year, with the first move in March, but this is more due to the Fed's dovish signals at the December meeting than how we see the US economy developing. Risks lean toward a later start and fewer cuts.
The ECB has stated almost in unison that rate cuts are not expected in the short term. We still see the first move in June, 25 basis points, and quarterly cuts of 25 basis points thereafter, but the risks lean toward an earlier start and steeper cuts.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
