Strong U.S. Growth Cools Bets On March Interest Rate Cut

The strong 3.3% U.S. GDP growth rate in 4Q cools bets that interest rates would be cut in March. While the government’s advance estimate is slower than the 4.9% pace in 3Q, it’s faster than the 2% consensus. The number suggests GDP growth could still be strong in the current quarter, Spartan’s Peter Cardillo says in a note. On the flip side, he says, “rates are likely to stay elevated until the later part of 2024.” On the CME’s FedWatch tool, odds that the Fed’s target rate would remain at the current 5.25%-5.5% range after the Fed’s March meeting rise to 53% from 45% a week ago.