Stock markets are setting up for another day of gains, thanks to Fed Gov. Christopher Waller, who sparked fresh optimism that the central bank is done hiking rates.
One of the biggest expectations for the coming year is that the Fed will pivot to cuts in 2024. Our call of the day is from hedge-fund manager Bill Ackman who doesn’t disagree, saying that needs to be done ASAP.
“I think the market expects sometime middle of next year. I think it’s more likely as early as Q1 [first quarter],” the founder and CEO of Pershing Square Capital Management said in a just-published excerpt from coming episode of “The David Rubenstein Show: Peer-to-Peer Conversations.”
(The market is currently pricing in a 41% chance of a rate cut by March, according to the CME FedWatch tool that derives rate probabilities off of trading in fed funds futures contracts.)
Ackman believes a weakening economy will “likely demand an earlier move…we’re seeing evidence of that in some of our companies…I have some concerns,” he said.
He didn’t elaborate on those names, but Chipotle CMG and Hilton Worldwide HLT, both sensitive to the economy, were among the fund’s top holdings as of late August. Chipotle stock has gained 59% this year, and Hilton’s up 32%, so they seem to be hanging in there for now.
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