Evidence from both futures markets in January 2024 and the subsequent Fed policy path shows Friedberg’s "higher for longer" call was directionally correct.

• What markets were pricing in January 2024:
– At the very end of 2023 and into early January 2024, futures and swaps markets were pricing six quarter‑point cuts in 2024, with the first cut expected in March, and at latest May.(business-standard.com)
– After the January 31, 2024 FOMC meeting, CME FedWatch–based analysis still implied the federal funds rate would fall to 3.75–4.0% by end‑2024, meaning roughly 150–175 bps of easing from the 5.25–5.5% range.(econbrowser.com)
– Commentaries at that time noted March cut odds had been near 90% before Powell pushed back, but markets still assumed a relatively early and aggressive cutting cycle.(rbcwealthmanagement.com)

• What actually happened:
– The Fed’s target range was raised to 5.25–5.5% in July 2023 and then held at that peak for more than a year, through mid‑September 2024.(axios.com)
– The first rate cut did not occur until September 18, 2024, when the FOMC reduced the range by 50 bps to 4.75–5.0%, explicitly described as the first cut in over four years.(axios.com)
– Subsequent 25 bp cuts in November and December 2024 brought the target range to 4.25–4.5% by year‑end, as confirmed by FOMC minutes and post‑meeting analyses.(federalreserve.gov)
– A March 2025 Federal Reserve Bank of San Francisco overview explicitly notes that the funds rate was cut by a cumulative 100 bps from its peak of 5.25–5.5%, with the target range at 4.25–4.5% by the January 2025 meeting.(frbsf.org)

• Comparison to the January 2024 futures path:
– Markets in January 2024 were effectively pricing:
1. First cut by March–May 2024; and
2. End‑2024 rate around 3.75–4.0%.(business-standard.com)
– In reality, the first cut slipped to September 2024, well after both March and mid‑2024, and the end‑2024 rate (4.25–4.5%) was materially higher than the 3.75–4.0% level implied by January futures.(axios.com)

• On his mechanism (lagging components): Later Fed commentary and research in early 2025 note that inflation in services such as shelter, health care, and insurance remained elevated and was a key reason policy stayed restrictive, which is broadly consistent with Friedberg’s argument that lagging components like insurance would keep inflation sticky.(frbsf.org)

Because (1) cuts were indeed delayed well past the March 2024 start and beyond mid‑2024, and (2) policy rates ended 2024 higher than what January 2024 futures were discounting, Friedberg’s prediction that U.S. rates would stay higher for longer than markets expected at the time is best judged as right.