Bank of America warns that markets are going to be disappointed with their overly bullish expectations for rate cuts from the Federal Open Market Committee (FOMC):
- “... markets now pricing close to 50bp of cuts this year, they are likely to get disappointed”
- Interest rate cuts are "still a way off"
BoA roll out a slew of reasons there will be no Fed Funds cut soon:
- 1Q inflation was too high
- a single print should not deliver much comfort, especially if it annualizes to a rate much higher than consistent with the Fed’s target,
- the economy is still solid, including services spending
- the labor market remains tight
- supply tailwinds could fade
- and elections are approaching
![Federal Reserve 21 May 2024 2](https://images.forexlive.com/images/Federal%20Reserve%2021%20May%202024_id_36784265-1b5d-4a3f-9956-43e546c08823_size900.jpg)