Dow Jones / Market Watch have a summary piece up that takes a broad look at the factors that are going to prevent a Fed rate cut any time soon:

  • global economic recovery is fueling a blistering commodities rally in 2024 - threatening to derail the Federal Reserve's efforts to curb inflation and potentially clouding its path to cutting interest rates by mid-year, according to market strategists.

It's a long article (its gated) but some of the major points, in brief (the bolding is mine):

  • commodities ... some surging to levels not seen in years ... Bloomberg Commodity Index tracks 24 of the most-traded commodities futures contracts in the energy, metals and crops sectors - it hit its highest level since November ... buoyed by energy and gold prices ... silver has also gained
  • The advance for precious metals has come despite a stronger U.S. dollar
  • "What's going on right now is that the market's sniffing out the possibility that global growth is going to be better than expected" with more global inflation and higher commodity prices, which makes it a "much more difficult environment" for the Fed to deliver three cuts as expected in 2024, said Nanette Abuhoff Jacobson, global investment strategist at Hartford Funds.
  • Abuhoff Jacobson pointed to a slew of robust economic data which showed U.S. factory activity grew in March for the first time since September 2022, while an industrial upswing in China has also added to the momentum for a global economic recovery. "China was a source of tremendous disinflation but its [economic] recovery means that disinflationary external force is also turning around," she told MarketWatch - adding that these dynamics have cast doubt on whether the Fed will start cutting rates in June.
  • oil prices extending their gains ... Stephen Lee, founding principal and portfolio manager at Logan Capital Management, said expectations that strong economic growth in the U.S. and elsewhere could boost oil demand may be the one key factor, rather than geopolitical conflicts, driving oil prices higher. "Oil is now more demand-related than [related to conflicts in] the Middle East,"

Oil, gold, cocoa, China ...