With the Fed having pivoted, we now see rate cuts starting in March. But easing too soon also means inflation will resurge and put an early stop to the easing campaign. ECB are more steadfast, despite a weaker outlook on both growth and prices. We believe the FOMCs shift in reaction function sets the central bank up for a policy mistake. The new focus on the real fed funds rate opens up for a measured pace of rate cuts (25bp per quarter) to start already in March. However, with still very little free capacity in the economy, this rate cutting campaign will soon hit the wall as inflation problems resurface. We do not ... (full story)