The evolution of rate cut enthusiasm in 2024 is an example of investors anticipating what will happen only to be proven wrong. The irony is that professionals on Wall Street frequently cite the Federal Funds rate futures as a basis for their outlook for monetary policy and the stock market. In July 2023 the Funds rate futures were pricing a 94% probability that the FOMC would lower the Funds rate at the June 2024 meeting. That optimism was replaced by pessimism and in September the probability of a cut in June was down to 37%. As inflation continued to decline...
