Just caught Bill Ackman, the big shot behind Pershing Square Capital Management, spill some beans on what he thinks is in the cards for the Federal Reserve. In a chit-chat on CNBC’s “Squawk Box,” he threw it out there that he’s putting his money on the Fed slashing interest rates faster and sooner than everyone’s guessing.
Why, you ask? Well, according to Ackman, the inflation vibe is chilling out, and money is feeling kinda pricey right now. In his words, central banks might have to roll up their sleeves and start making moves earlier than expected. And get this – he’s thinking they might go all out with more than just three rate cuts.
So, what’s the deal with these cuts? Ackman breaks it down – three cuts would mean a 15% dip in interest rates, no big deal, right? It’s like the Fed’s version of turning down the thermostat.
He’s throwing it out there that these cuts could be the boost that equities need, as long as they hit the brakes on rates fast enough to steer clear of a major recession.
Market Buzz: More Cuts in the Forecast?
But hold on a sec. While the Fed was talking about three cuts at their December powwow, the market’s getting a little more gung-ho. Traders in the fed funds futures game are rolling the dice on six cuts this year, with a solid 83% chance that the first one might drop in March. CME Group’s FedWatch tool is painting that picture.
But not everyone’s on board with this hype train. Larry Fink, the big cheese over at BlackRock, the world’s biggest asset manager, isn’t vibing with the crowd. He’s got a gut feeling that the Fed’s gonna play it cool and won’t be cutting rates three times this year.
And guess what? Economist hotshot Paul Krugman just shouted from the rooftops that inflation in the U.S. is practically waving the white flag. He’s waving around numbers from the U.S. Core Consumer Price Index, saying it’s been tamed. Over the last year, it clocked in at 3.9%, but more importantly, in the last six months, it’s down to 3.2%. Krugman’s giving a nod to the fact that without shelter costs messing with the data, the inflation headache is way less severe at just 1.6% in the last six months.
So, there you have it – Ackman’s calling for a rate-cut extravaganza, the market’s throwing dice for even more, Fink’s preaching caution, and Krugman’s saying inflation is taking a nap without the shelter cost drama. Quite the rollercoaster, huh?