Damage Done by the Banking Crisis Looks Overpriced: John Authers

To get John Authers’ newsletter delivered directly to your inbox, sign up here.

Much Ado About Banking

To start, let’s compare the market’s implicit expectation for the course of the fed funds rate on New Year’s Eve with its forecast as of April Fools’ Day. Bloomberg’s World Interest Rate Probabilities function shows that confidence in significant rate cuts before the year is out has grown:

On the face of it, this would imply that inflation is coming under control a little ahead of schedule, creating space for the Federal Reserve to ease the pain a bit early as well. ...