Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action news and analysis.

Good afternoon. Today is Wednesday, December 13th, and I'm your host Kim Khan. This is a special

Fed edition of Wall Street Lunch. The Federal Reserve closed out the year, keeping rates steady,

in the range of 5.5% as expected. It was the third

meeting in a row the FOMC is decided on no action and it also came with a clear

indication that this unprecedented hiking cycle is over.

Market participants keyed in on the dot plot in the latest summary of economic projections.

FOMC members are pricing in 75 basis points of cuts next year.

The median forecast was a rate of 4.6 percent, down from 5.1 percent in September.

The median of core PC inflation dipped to 2.4 percent from 2.6% closer to the Fed's 2% target.

University of Michigan economist Justin Wolfers said that this dot plot is the admission

that interest rates have gone as high as they're going,

and at some point in 2024

we'll see two three or four rate cuts. Gregory Doco, economist at EY, called it a more

realistic view of the inflation outlook, acknowledging one strong

disinflationary momentum and two more disinflation in the pipeline.

Chances of a first rate cut coming in March jump from below 50% to 75% according to Fed Funds Futures trading.

Traders are now pricing in six quarter point rate cuts by the end of 2024, twice what the dot plot

says, and more evidence that the markets are also buying into the soft

landing scenario big time.

Treasury has rallied sharply right after the release.

The two-year Treasury yield, most closely tied to the Fed funds rate, tumbled nearly 30 basis points below 4.5%.

...