Fed Expected to Cut Rates Twice in 2024: Will They Deliver?

The Federal Reserve's interest rate decisions are a major driver of the stock market, and according to a recent survey by Strategas, investors are anticipating a dovish turn from the central bank.

Investor Expectations:

• The survey suggests investors expect the Fed to cut rates twice before the year's end, likely in November and December.

A Reality Check:

• It's important to remember that this is an investor expectation, and the Fed's actual decisions might differ.
• The Fed's most recent projections, as of their June meeting, indicate only one rate cut is on the horizon by December.

Data in the Driver's Seat:

The Federal Reserve bases its decisions on a complex analysis of various economic data points, with inflation being a major concern. Recent strong jobs data could influence the Fed to be more cautious about cutting rates as quickly as investors anticipate.

Don't Be Swayed by Sentiment Alone:

Investor expectations can influence market sentiment, but they shouldn't be the sole factor driving your investment decisions. Stay informed about upcoming economic data releases and the Fed's policy updates to make well-rounded choices.

Fed Fog: Uncertainty Reigns Supreme

The article also highlights some disagreement among Fed members regarding rate cuts. This discord underscores the uncertainty surrounding the Fed's future actions. Futures markets currently predict three rate cuts by year-end, which is more aggressive than both the investor survey and the Fed's projections.

Navigate Market Uncertainty with DEMA

Regardless of the Fed's ultimate decision, market volatility is almost guaranteed. Consider incorporating the Double Exponential Moving Average (DEMA) into your technical analysis toolkit to potentially smooth out short-term price fluctuations and reveal underlying trends.

DEMA 101:

• DEMA assigns less weight to older price data compared to the Single EMA, resulting in a smoother technical indicator.
• This can help you:
  • Spot underlying trends: By filtering out short-term noise, DEMA can reveal longer-term trends that might be obscured by daily market fluctuations.
  • Make informed decisions: Smoother technical analysis based on DEMA can lead to more strategic trading decisions based on clearer trend signals.

Take Charge of Your Investments:

Don't let short-term market gyrations cloud your judgment. Conduct your own research, incorporate DEMA analysis, and stay informed to make strategic investment decisions aligned with your risk tolerance and financial goals.

DEMA API: Learn more about the DEMA API and empower your trading strategies: Financial Modeling Prep DEMA API Documentation