Hartnett: "Here They Come... 152 Rate Cuts In 2024"

Less than two years after the most aggressive rate hike campaign since Volcker's quest to crush 20% inflation began in March 2022, the Fed has officially conceded that it is willing to tolerate higher inflation if Joe Biden is to win the 2024 presidency (and avoid stoking a recession in an election year). Of course, the Fed will never admit that but people also would never admit that the Fed is a political creature until former NY Fed president Bill Dudley destroyed the central bank's "apolitical" facade with his 2019 oped insisting the Fed crush the economy  to prevent Trump from getting re-elected (Dudley got his wish in the end).

Meanwhile, the understand just how bizarre the Fed's decision was to announce a dovish pivot when core CPI is still 4%, consider the following "Biggest Picture" anecdote from the latest Flow Show by Michael Hartnett in which the BofA strategist writes that on only 5 occasions in the past 90 years has the Fed cut rates when core CPI (now 4.0%) was higher than the unemployment rate (3.7%). Of those five occasions, the cuts were triggered by war once (Oct'42) and a recession four times (Oct'69, Aug'74, May'80, Jul'81).