Tighter Fed Expectations Not Slowing Markets

  • Market participants are beginning to recognize that interest rates may stay higher for longer (see chart), with expectations over the last few weeks moving from several cuts to 2-3 cuts by the end of 2024.
  • Interestingly, expectations for more restrictive financial conditions have not done much to slow down risk assets.
  • The S&P 500 is up more than 7% in 2024 through the end of February while Bitcoin, which if nothing else has been a decent proxy for risk appetite in markets, is up more than 40%.
  • This is a small sample size, but it’s worth contrasting against the narrative that Fed policy has a significant impact on markets in the short/intermediate term.


  1. Investor’s Business Daily; https://www.investors.com/news/economy/fed-rate-cuts-federal-reserve-sp-500/
  2. Morningstar Direct
Feds Fund Rate

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