The Fed’s nightmare scenario becomes more likely

Published March 14, 2024 4:34pm ET



For nearly six months now, investors have operated with one assumption leading to one single question: when, not if, the Federal Reserve will finally pivot and begin slashing interest rates. And while Treasury‘s futures seemed to ignore the central bank’s repeated assertions all winter long, investors have finally fallen in line with the Federal Open Market Committee’s projection that it will only cut rates three times this year, not twice as many, as investors deluded themselves into believing as late as this January.

But the recent bevy of abysmal inflation reports raises an opposite possibility: that it’s not a matter of when the Fed lowers interest rates but rather if it raises them again.

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