Weighing Fed Cut Against Jobs and Inflation Risks

In this episode of "Thoughts on the Market," Matthew Hornbach and Michael Gapen discuss the Federal Reserve's recent meeting and its implications, particularly the anticipated first quarter percent rate cut in 2025. Gapen highlights the Fed's concerns about downside risks in the labor market and the potential for a series of rate cuts, while Hornbach analyzes the market's reaction to the Fed's announcements, noting an initial positive response that later moderated. They also explore the differences between the Fed's economic projections and market expectations, especially regarding the unemployment rate and the path to a neutral policy rate, with both hosts anticipating the Fed to potentially adjust its forecasts based on incoming data.