Pause Watch: 25 bps and then a pause!?
![FED Watch](https://stenoresearch.com/wp-content/uploads/2023/06/FED-Watch.png)
A Fed pause historically means that the recession clock starts ticking and rings in the recession when the Fed starts cutting. The outlook for cuts? That’s properly worth a watch series on its own but with long-end rates below 4%, equity markets making YTD highs, strong corporate profitability and a labor market that still shows strength, we venture to say that those cuts are likely not around the corner.
Chart 1: A pause means the recession clocks start running
Everything points to a 25 bps hike and then a pause from the Fed at today’s FOMC meeting so where does this leave us historically and what do we think about the outlook? Time for a Fed pause watch!
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