Markets are now pricing in 50bps US Fed rate cut in 2023: Chris Wood

The US Fed raised the target range for the federal funds rate by another 75 bps to 2.25-2.50 per cent in its July meeting. The FOMC statement has downgraded its assessment of the economic situation

Markets are pricing in a 50 basis point (bps) rate cut by the US Federal Reserve (US Fed) in 2023, wrote Christopher Wood, global head of equity strategy at Jefferies, in his recent note to investors in GREED & fear. The issue for markets in the medium-term, he said, remains whether the US Fed really intends to try and get inflation back below 2 per cent or whether it will in due course signal a more pragmatic (i.e. more flexible) approach to that 2 per cent target.