The article discusses changes in market expectations for future interest rate cuts by the Federal Reserve. In September, the market priced in multiple 50-basis point cuts that would lead to a 3% fed funds rate by 2025. However, the current outlook is more conservative, with only one to two cuts priced for 2025. Factors driving this change include stubborn inflation and a stronger labor market. The article also mentions that there are still dovish voices within the Federal Open Market Committee (FOMC), such as Governor Waller, who supports rate cuts this year. The market is expected to continue experiencing extreme shifts in sentiment, and investors must decide how to respond to these changes.



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