Rate cuts are now the expectation as fed balance sheet grows

Quick Take

• The outlook from markets has wholly changed successful the past fewer weeks owed to banking failures successful the US and EU.
• The marketplace is present pricing successful nary much complaint hikes but important cuts, ending 2023 astir 3.75-4%.
• Four cuts are priced into the remainder of the year, portion the marketplace suggests a greater than 90% accidental the Fed is done raising rates.
• The fed equilibrium expanse has grown for the past 2 consecutive weeks; astir $100 cardinal was added to the equilibrium expanse this week.
• While two-thirds of quantitative tightening person been undone successful a substance of weeks.
• This is the 3rd biggest percent alteration to the fed equilibrium sheet, lone being beaten by covid and 2008.

Meeting Probabilities: (Source: CME)

Total Assets percent change: (Source: FRED)

The station Rate cuts are present the anticipation arsenic fed equilibrium expanse grows appeared archetypal connected CryptoSlate.