FX168 Financial News (North America) reported that analysts at Piper Sandler (Piper Sandler) said they expect the Federal Reserve to cut interest rates 3 times in the next 8 meetings.

The investment firm notes that since the last Federal Open Market Committee (FOMC) meeting, the probability of extreme outcomes — such as drastic interest rate hikes or sharp interest rate cuts — has declined. #2024宏观展望 #

Although uncertainty about inflation has abated, analysts said the broad distribution of gross domestic product (GDP) growth forecasts left the economic outlook uncertain.

“Our density predictions for key macroeconomic variables are still too broad,” they said.

“Yes, the distribution of inflation results has shrunk significantly during this cycle. But, as we have emphasized time and again, this is not the case with real GDP growth. The possibility of a recession and rapid growth is high, and this will not strengthen 'confidence' in the Federal Reserve.”

Analysts also pointed out the market's pricing of short-term interest rates. They believe that short-term interest rates may increase compared to long-term returns, which means that the prospects for a steep yield curve are still far away.

They stressed that judging from the basic model, the nominal yield curve is not sufficiently inverted; they also hinted that 2-year and 10-year yields may rebound until the end of the year.

“Indeed, these signals are not unprecedented. Despite this, the results suggest that the prospects for a steeper yield curve are still far away.”