I sense that the first quarter of this year will be marked by the realization that it’s too early for the central banks to cut the interest rates unless something really bad – like another bank crisis, or a real estate crisis, or another debt crisis hits the fan.
Because March – where market prices reflect the first rate cuts from both the Federal Reserve (Fed) and the European Central Bank (ECB) – is about two months away, and things don’t look *that* bad.
In Europe, growth is slowing, Germany is struggling to reverse slow down, the slump in the Eurozone’s accelerated, and production fell 6.8% in November from a year earlier.
Over the last 9 readings, only one came in positive, and it was a small 0.2% growth back in June. But the economic slowdown is what the ECB needs to pull inflation lower.
And unless there is a sharp slowdown in economic activity, the ECB…
