From CNBC:

Club Mailbag, email [email protected], allows you to send questions directly to Jim Cramer and his team. They consider general investment questions. This week’s question: CNBC guests claim six Fed cuts are priced into the 2024 market. How do they know? Is it just their opinion? The data comes from the CME FedWatch tool, which leverages fed funds futures contract prices to gauge the likelihood of a rate cut or hike. The current range is 5.25% to 5.5%, with 11 rate hikes from March 2022 to July 2023. Pause in June, November, and December. End-of-year predictions are based on the market’s forecast for the Fed target rate by December. This forecast is leaning towards the highest probability of a 375 to 400 basis points cut by year-end. The market expects a 150 basis point cut in 2024, six 25-basis point cuts. The January meeting predicts a 94% probability of the Fed holding rates. This data should be compared to one’s own outlook, as the market’s valuation model may be pricing in a lower rate environment more quickly than realized. While general view is that lower rates are better for stock, more important is the reason why rates are low. Are they low because inflation has decreased and the economy is still strong, or because the economy is slowing? If you’re a subscriber to CNBC Investing Club with Jim Cramer, you will receive trade alerts before Jim makes a trade. If Jim has discussed a stock on CNBC TV, he waits 72 hours after issuing the trade alert before trading. There is no guaranteed outcome or profit.



Read more: You hear the market expects six Fed rate cuts this year — here’s where that data comes from