Deutsche Bank-DBDaily Could Fed funds bottom out above 4-106713181 (1)

DeutscheBankEconomicsDateResearch27February2024DBDailyGlobalCouldFedfundsbottomoutabove4%?CouldFedfundsbottomoutabove4%?PhilOdonaghoeUSA:DallasFedmfgactivity(Feb):Up16.1ptsto-11.3,abovemkt.EconomistUSA:Newhomesales(Jan):Up1.5%momto661ksaar,belowmkt.+61-2-8258-1606UK:CBIretailsalesindex(Feb):Up43ptsto-7,abovemkt.JPN:PPIservices(Jan):Up2.1%yoy,belowmktPODCAST:ListentoMattLuzzetti,MattRaskinandMattBarnarddiscusstheoutlookfortheFedyieldcurveafterhotinflationprints.20minutes,here.USequitieswerelittlechangedMonday,S&Pdown0.1%.US10yryieldsup4bpsto4.28%.AbeatonDallasFedmanufacturing,up16ptsto-11.3inFebruary.Figure1:MarketSummaryECB'sLagarde:Europe'seconomyshould"pickup"laterthisyear,wagepressuresEquities5082.22-0.1%FX0.04%"remainstrong".S&P500495.43-0.4%EURUSD1.0852-0.05%Stoxx600-0.3%USDJPY150.700.07%TheS&P500hasnowadvancedfor15ofthelast17weeks.HenryAllennotesthisFTSE7684.300.3%GBPUSD1.26880.13%hasonlyhappenedoneothertimeinthelast50years,backin1989.AIexcitement,Nikkei22539233.71-1.0%USDCAD1.3501-0.11%ratecuthopesandbettermacrodatahelpexplainwhy.ButtherallyisalsoveryCSI300-0.04AUDUSD0.65420.05%narrow,andinflationpersistencecouldbecomeproblematic.VIX3453.36NZDUSD0.617713.71Therearedecentprospectsforthefedfundsrateto“bottomout”duringthiscycleabove4%.MattLuzzettidrawsthisconclusionbyarguingthatitisusefultoframeDebtComm...