There's a lot of talk about 2024 and 2025 dots but consider this: A year ago there wasn't a single Fed dot above 0.75%. The Fed will ultimately go where the data takes it and if you believe inflation is coming down or a recession is coming, that's the trade and not the Fed.

However I think a big risk that markets are fearful about is over-tightening. I think the market can handle 4-5% Fed funds (though it's a strain). The fear trade is +5% Fed funds.

What's comforting markets is that not a single Federal Reserve governor or regional president sees Fed funds above 5% next year. It means no one around the table will be arguing to hike aggressively next year. That caps the terminal rate at 4.75-5.00%, which is barely higher than the 4.6% priced in.

Like I said, the Fed will go where the data takes it but with Europe headed to a recession and the dollar up 20% this year, that will soak up a lot of demand. Most don't think the Fed will get to 4.75-5.00% but if it does, it's downhill from there and the only question is the timing.