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- Market hopes for big cuts this year are unlikely to pan out, Deutsche Bank wrote.
- Today's economy is similar to 1995, when cuts came in below market predictions.
- A productivity cycle from AI could keep the US from falling into a recession, keeping rates up.
Markets may find that the anticipated rate-cutting cycle falls short of expectations, Deutsche Bank's George Saravelos wrote on Friday.
That's not so much due to its timing, but rather because interest rates won't fall as aggressively as predicted. Futures markets forecast five to six cuts this year, slashing the fed fund rate by over 100 basis points by the year's end.