Chamath @ 00:14:05Wrong
economymarkets
The Federal Reserve will largely finish raising interest rates by the end of 2022 and will likely begin cutting rates in the second half of 2023.
So what he effectively did in one speech is basically put a pin at the end of this year and is telling the markets I'm mostly going to be done. And if anything, I'm probably going to be cutting in the back half of 23.View on YouTube
Explanation
Chamath said the Fed would "mostly be done" raising rates by the end of 2022 and would "probably" start cutting in the back half of 2023.
What actually happened:
- The Fed kept hiking well into 2023, not just 2022. After the Dec. 14, 2022 hike to 4.25–4.50%, the FOMC raised rates four more times in 2023 (Feb. 1, Mar. 22, May 3, and July 26), ultimately reaching 5.25–5.50%. That means rate increases were not largely finished by the end of 2022; the hiking cycle continued and only peaked in July 2023. (forbes.com)
- There were no rate cuts at all in 2023. From July 2023 onward, the Fed held the federal funds rate steady in the 5.25–5.50% range through its November and December 2023 meetings, while only signaling that cuts were likely in 2024. (cnbc.com)
- The first actual rate cut of this cycle came later, with a 50 bp cut at the September 18, 2024 FOMC meeting—well after the second half of 2023. (cnbc.com)
Because the Fed was not mostly done hiking by end-2022 and did not begin cutting in H2 2023, the prediction is incorrect on both key elements.