The Fed funds futures predicts rates will drop in the range 5-5.25% on May 1,2024 with a 52.7% probability. This coincides with a few recent developments:
1) The Bank Term Funding program ends on March 11,2024. This will put additional pressure to lower rates sooner rather than later. Jerome Powell will not want to see a repeat of another Silicon Valley bank crisis.
2) The reverse repo facility will run out of money in another 3 months or so which coincides with the May 1 Fomc meeting. Who will be buying these treasuries and more importantly, when will the Fed suspend QT?
In my opinion, this signals to me that the yield curve can continue to remain inverted until something breaks. In other words, the economy and stock market can continue to do well until the yield curve uninverts. Then, shtf and the US will enter a recession.