Not so fast, my friend!
ALM Strategy | ALCO | Interest Rates
Autumn is a beautiful time of year in New England as the weather cools and the leaves transform into orange and red hues. Throw in the return of college and professional football, and it is by far my favorite season of the year.
In the markets, there was speculation as the summer heat faded that inflation may be following that same trajectory: we would hit a terminal fed funds rate in the mid-3% range by year-end, with building momentum for potential rate cuts forthcoming as 2023 progressed.
Yet as we all know by now, the markets and the Fed were off… again.
The third straight 75bp rate increase by the Fed at their September meeting, as well as their “hawkish” tone and increased dot plot projections, set off another end of quarter bond market sell-off and quelled for now the narrative that this rising rate cycle may be nearing its end.
It reminded me a bit of the famous college football coach, Lee Corso. He is not widely remembered for his actual coaching record (73-85-6 in 15 seasons), but is known more for his 35-year career on television as an analyst, mostly on ESPN’s widely-watched College Gameday program each Saturday.
Before I had children, watching Coach and the rest of the crew was a staple of my fall Saturdays (not so much anymore 😊), and it was always worth watching the entire show, waiting for him to drop his inevitable signature line as the group made their predictions on who would win each game.