Fed's March Dot Plot and Rate Cut Probability

It's increasingly looking like the market is getting ahead of itself regarding the Fed's stance for 2024. While the narrative has shifted heavily towards multiple rate cuts, the underlying economic data, particularly the recent inflation prints, don't scream 'emergency easing' just yet. I'm assigning a roughly 60% probability that the March dot plot will indicate fewer than three rate cuts for the year, with the median perhaps settling at two, or even just one.

The reasoning is fairly straightforward: wage growth, while moderating, is still sticky. Services inflation remains persistent. And employment, while showing some cracks, isn't collapsing. Powell and company have been clear about their data-dependent approach, and the data, for now, suggests they can afford to remain cautious. The market's aggressive pricing for cuts might force them to push back more strongly, or at least maintain a higher for longer tone, even if they don't explicitly say it. I think any initial cut in Q1 is off the table, and Q2 is looking less certain than a few weeks ago. The risk, as always, is that something breaks, but absent that, the current path suggests measured, not rapid, easing. For those watching the peripherals like $SHIB, I don't see this macro outlook as providing any significant tailwind short-term; its movements are almost entirely uncorrelated to these deeper economic indicators, as evidenced by its current flatlining around $0.00000415 amidst broader macro re-evaluation.