FED Rate Cuts start this spring possibly

Interest rate projection 2024Futures markets forecast there will be four or five rate cuts in 2024, amounting to a quarter of a percentage point each. The cuts, they predict, should start by spring, and ultimately drop interest rates as low as 4% to 4.25%.Dec 13, 2023

My comment. I expect the markets to drop first.


Leap 1, I agree…Drop it will at some point. But is it a 5% drop, 10% drop…or a major 30% drop. We dont need a catalyst for 5 to 10% drops. But we do need a catalyst for the 20-30% drops. So, with the FED cutting rates, a tailwind, what could that be? The one thing which comes to mind is the Commercial Real Estate…but if the FED cuts rates, shouldnt that somewhat soften the blows. When is most of the Major Commercial real estates due for refinancing? If it beyond 2025, then they will be fine, right? But if it is in 2024, will 4plus % refinancing rate be a major shock?

The FED will cut rates for the factory buildout. That won’t save the CRE loans.

Will the foreclosures crescendo soon?

Some of the forecasts for 2024 have the delinquency rates rising to 4%. That is considered very high.

The issue is there is more paper because of how low the rates were. This can affect corporations holding the paper.

This is the historical chart.