How Many Interest Rate Cuts in 2024?

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In January 2024, the market had priced in more than 150 basis points worth of interest rate cuts. This
suggested six 25-basis-point cuts throughout the year. Market participants believed that economic
weakness was on the horizon, thus pricing in more cuts than the Fed’s Summary of Economic Projections
(SEP).


Why the Change?
The continued strength of the labor market has fueled consumer spending and confidence. Energy
prices have remained in focus, and natural gas prices have fallen by more than -30% year-to-date. Some
may even say that inflation is reaccelerating as CPI and PPI numbers for the month of January came in
hot. This has driven the bond market to slash interest rate cut expectations, putting pressure on some
risk assets, but not all.
What is the Bond Market Pricing now?
As we can see from the chart above, Fed Funds futures are now pricing in 75 basis points worth of cuts
in 2024, with a 73% chance of that first cut taking place in June and a 90% chance of the first cut taking
place in July. The interesting thing to note here is that the bond market is now pricing in the same
amount of interest rate cuts as the FOMC’s latest Summary of Economic Projections (SEP). In other
words, the two expectations have now converged.


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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points that can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results all of which can adversely affect actual trading results.

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This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

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