Figure 1: Fed Funds Futures price 225-250 bps of rate cuts between now and mid-2026

Figure 2: Rate expectations have been choppy over the past two years

Figure 3: In February 2022, investors underestimated the number of rate hikes by 325 bps

The 2019-2020 Easing Cycle

Figure 4: In 2019, investors expected Fed easing and were close to the mark until the pandemic set in

The 2007-2008 Easing Cycle

Figure 5: In 2007, investors priced 100 bps of rate cuts and wound up with 512.5bps of easing

2001-2003 Easing Cycle

Figure 6: In late 2000, investors priced 50 bps of Fed cuts and wound up with 11x as much

The 1998 Easing Cycle

The 1995-1996 Easing Cycle

Figure 7: Rates traders were spot on in pricing the mid-1990s soft landing

The 1989-1992 Easing Cycle

Figure 8: Interest rate markets were blindsided by the 1990-91 recession

Figure 9: Core inflation has been coming down but remains above pre-pandemic norms.