Barclays view market expectations for Fed rate cuts as too aggressive

<p>Barclays with comments on the Federal Open Market Committee (FOMC) and equity markets for the year ahead. </p><p>Analysts at the banks say the market is correct in looking for rate cuts, but is too optimistic:</p><ul><li>“Although the rate cuts priced in the US look too aggressive to us absent a deep recession, we agree that the direction of travel is towards lower rates”</li></ul><p>Analysts look for equities to see some upside in 2024, but limited gains:</p><ul><li>“We expect a higher, yet more sober, equity market in 2024. </li><li>Post an exceptional year-end rally, the bar for positive surprises has been raised </li><li>Cyclicals look toppish</li><li>it'll be a “healthy consolidation” </li><li>better valuations and earnings could potentially add to some upside potential</li></ul><p>Ps, speaking of equities, Japan's Nikkei benchmark 225 has climbed above 35K, its highest since February 1990.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.