Three Must-See Charts About the Future of Interest Rates

The video discusses the recent Fed minutes and their impact on rate hike probabilities, noting a return to earlier market expectations. It explores market reactions, financial conditions, and the Goldman Sachs index, which equates changes to rate hikes. The shadow funds rate and its implications for the tightening cycle are examined, highlighting the need for alternative metrics due to minimal interest rate increases. Finally, the video analyzes inflation and core PCE data, questioning if the current deceleration meets the Fed's criteria for action.

What was the market's expectation for the number of rate hikes over the next year after the Fed minutes?

• Three rate hikes

• No rate hikes

• One rate hike

• Two rate hikes

How does the Goldman Sachs index relate to rate hikes?

• It suggests no change in rate hikes

• It indicates a decrease in rate hikes

• It equates a 145 basis points change to four rate hikes

• It predicts future rate hikes

What is the significance of the shadow fed funds rate?

• It shows no tightening has occurred

• It indicates more tightening than the actual rate hike

• It suggests a decrease in financial conditions

• It predicts future rate cuts

What is the Fed's target for PCE inflation?

• 2.5%

• 2%

• 1.5%

• 1%

What was the core PCE inflation rate in March?

• 1.3%

• 1.7%

• 1.6%

• 1.5%