(Bloomberg) — Wall Street pared its bets on Federal Reserve rate cuts on speculation the dovish bid emboldening stock and bond bulls has gone too far.
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Equities fell, while Treasury yields climbed with the dollar as Fed Governor Christopher Waller appeared to push back against expectations for as many as six rate cuts this year. While Waller wasn’t outright hawkish, his remarks weren’t massively dovish either — prompting a recalibration of interest-rate wagers. Fed swaps show the probability of policy easing as soon as March dropping to about 65% from almost 80% Friday.
Waller said the Fed should take a cautious approach when it begins cutting rates, adding he sees no reason to move as quickly as in the past — pointing to previous economic shocks that have precipitated rapid rate cuts. To Kathy Jones at Charles Schwab, when you get either a data point or a comment like Waller’s, that seems to imply:…
