Friday Workout — Roll-up for HoldCo PIK; slippery little suckers
- Chris Haffenden
Last week I suggested that the Santa rally had come early this year and further gains might be limited. But Wednesday’s FOMC meeting produced further Xmas presents for investors with gifts of lower dot plots and dovish language. US 10-year yields dipped below 4% (3.92% close on Thursday), with a 25bps cut in March now rated a 100% certainty by analysts and 125bps of cuts in total forecast for 2024.
Admittedly, despite the recent pivot from the higher for longer narrative, markets are still well ahead of the central bank officials in their rate cutting expectations. However, the table from ING below shows the extent of the dovish shift from Fed officials since September.