Bond Market Assumptions 17 March 2024

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The Bond market’s assumption that the US economy will achieve a ‘no-landing’ or at least a ‘soft landing’ outcome, still remains the most likely outcome in 2024 but it will not be done with the Federal Reserve’s inflation target having been achieved.

The Equity market with its records, and the credit market with its tight margins, appears to conclude that the economy will keep growing at a nice pace and that higher inflation can be accommodated. This hinges on the Federal Reserve sticking to its dot point chart plan of three 25bp cuts this year.

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