At the end of 2021, the market knew the Fed would have to move away from ultra-accommodative monetary policy, but no one had a cash rate over 5 per cent in their projections.
After getting it so wrong on the way up, I’m not so certain the market will be any better on the way down either. And for 2025, the market is pricing in 170 basis points worth of cuts, which is still too much. Our economics team expect just 100 basis points of easing next year, setting the market up for further disappointment.
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