This is the most expected recession we have seen in a long time. This usually means its not going to happen. I dont see rate cuts unless inflation is sub 2%
This is a big "if", but if prices stay steady through January's data (released in Feb 2024), then the Fed's perferred PCE price index will be at 2% for January. That is actually a possibility since the holidays often bring price reductions with Black Friday sales, holiday sales, post Christmas sales, and low travel (thus lower gas prices).
It is much more likely though that prices won't stay steady. If they rise slowly, then the PCE price index could hit 2% in April's data (released in May). This is why I think the markets are pricing in a rate cut in the spring.
But, I think there is a fundamental logic flaw there. The Fed won't just see 2% and call it good and immediately cut rates. They'll want several months of data past that point to see if inflation stays low. Plus, the Fed doesn't like to make many changes during an election. So, I personally wouldn't bet on a rate cut until after the election. That is, unless something major and unexpected occurs.