Perhaps now the equity market understands that it would be impossible for the Fed to normalize rates if the central bank was to take rates back down to zero in short order due to the Banking crisis or for any other reason.
Wednesday’s FOMC projections show that the Fed plans to keep rates elevated and that the committee’s median projection for its 2024 Fed Funds rate (4.3%) is higher than the committee’s previous 2024 median projection (4.1%) despite the Banking crisis unfolding in the interim (see table below).
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