TD Joins Several Other Analysts Pulling 2024 Fed Cuts Forward

TD is the latest to alter their Fed rate view after this week's FOMC meeting:

• "Given an increasingly improving inflation outlook, based on our near-term inflation forecasts, and the Fed's shifting preemptive focus on achieving a soft landing, we now expect the FOMC to first ease rates in May 2024 vs our earlier expectation for June. We continue to pencil in 250bp of cumulative cuts (200bp of those next year) as growth concerns will likely lead the Fed to front-load policy accommodation in 2024."

We've seen a few other views changes since Wednesday, based on similar reasoning to TD's:

• Barclays three rate cuts in 2024, starting in June, with reductions at every other meeting thereafter. Pre FOMC their view was: First cut in Dec 2024, 25bp at every other meeting in 2025, eg 100bp of cuts.
• Goldman now see 25bp cuts in Mar, May, Jun 2024, then slowing to once per quarter until reaching 3.25-3.50%, 25bp lower than their previous estimate. (View pre-FOMC: first cut Q3 2024, reductions continue until 3.5-3.75% in early 2026).
• JPMorgan now look for a first cut in June 2024 (previously July) with rates 125bp lower by year end.
• Commerzbank now sees 6 25bp rate cuts in 2024 (previously had seen 4), in addition to the 2 they'd previously already seen in 2025, to a 3.25-3.50% target range.