"Market Expects 144 bps Rate Cuts as Fed Bridges Gap and Powell Pivots for a Happy New Year"
The Fed funds futures market is now pricing in 144 basis points of rate cuts for next year, up from the previous estimate of 107 basis points. The lack of pushback from Fed officials and a similar dot plot have reinforced market expectations of rate cuts. As a result, the market will continue to price in cuts, as seen in the surge of US 2-year yields.