Search Results for: funds

Market-Implied Change in Fed Funds Rate Traders are anticipating a total of 75 bps in interest rate cuts by the Federal Reserve over the next 12 months. Image: Goldman Sachs Global Investment Research

Fed Funds Rate – Target Probabilities at the Fed’s FOMC Meeting In light of Fed chair recent comments, market expectations for a rate cut at the upcoming FOMC meeting on December 18, 2024, have shifted. Traders now estimate a 61.9% probability of a 25 basis point rate cut at this meeting. Image: CME Group

Interest Rates – Fed Funds Futures Curve After the Federal Reserve’s recent meeting, the slope of the fed funds futures curve has increased slightly, indicating a shift in market expectations regarding future interest rate movements. Image: The Daily Shot

Federal Funds Target Rate While the Fed has begun easing monetary policy, the current federal funds rate remains notably above their estimated neutral rate, with plans for further gradual reductions to bring it closer to neutral over time. Image: Goldman Sachs Global Investment Research

U.S. Money Market Fund Assets and Fed Funds Rate The current environment suggests that a substantial amount of capital is poised to flow back into equity markets, driven by expectations of favorable economic conditions and monetary policy adjustments. Image: Goldman Sachs Global Investment Research

Median Monthly Flow into Equity Mutual Funds and ETFs as a % of Total AUM November historically marks a period of increased investor activity in equity markets, often leading to substantial inflows. Could the S&P 500 hit 6,000 by year-end? Image: Goldman Sachs Global Investment Research

U.S. Money Market Fund Assets vs. Federal Funds Effective Rate U.S. money market funds are sensitive to changes in interest rates, and historical trends indicate that they often experience outflows approximately 12 months after an initial Fed rate cut. Image: Real Investment Advice

S&P 500 Index and Fed Funds Effective Rate While Fed rate cuts typically provide a short-term boost to market sentiment, historical trends suggest they often coincide with economic slowdowns. Image: Real Investment Advice

U.S. Domiciled Mutual Funds While U.S. money market holdings remain historically low, equity allocations are high, reflecting a significant shift in investor behavior towards riskier assets in pursuit of higher returns. Image: Goldman Sachs Global Investment Research

U.S. Recessions – 6-Month Fed Funds Minus Current Fed Funds Rate Historically, U.S. recessions have often followed periods of bearish short-term interest rates, particularly when the Fed cuts rates in response to economic downturns or signs of slowing growth. Image: BofA Research Investment Committee

S&P 500 TTM YoY EPS vs. Fed Funds Target Traditionally, when the Fed starts cutting interest rates, corporate profits tend to decelerate. However, this’s not the case today, highlighting the unique economic landscape we face. Image: BofA US Equity & Quant Strategy