Free Trial

MNI Fed Review - Dec 2023: The Dovish Pivot Arrives

  • Every element of the December FOMC communications was more dovish than expected, spurring one of the biggest post-decision downward rate repricings and US dollar sell-offs in years.
  • The forecast rate cuts in the Dot Plot were slightly dovish versus expectations, and the Statement made it surprisingly clear that the Fed is done hiking.
  • And all of the peripheral surprises skewed dovish, including a slight pullback in some longer-run rate forecasts, and a very low 2023 inflation estimate.
  • But the most remarkably dovish element of all may have been Chair Powell’s press conference, in which he delivered little pushback to market expectations of significant rate cuts next year, citing “great” progress in inflation - and openly discussed the fact that the topic of future easing came up at the FOMC meeting.
  • A first cut in March 2024 is now the market’s base case scenario, and multiple analysts who had previously seen the easing cycle beginning later next year have pulled their expectations forward.


To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.