Enjoy now; expect Annus Horribilis.

"As 2024 comes into view, investors, economists, business leaders and everyday consumers from London to Lyons to Los Angeles share a common hope: Let the interest rate cuts begin!" "After starting the year with annual inflation rates that were on average 3.7 times the 2% target,..the pace is now down to 1.5 times that target." "A major game of chicken is now underway" as "projections from Fed officials themselves indicated they expect 75 basis points rate reductions over the course of 2024, bond and rate futures markets are now positioned for twice that amount." Reuters. "Central banks cannot solve all that ails our economies." So they should be humble. "Crucially, embracing a humble approach requires central banks to keep their focus on the inflation anchor." "Now is not the time to question or lose sight of the goal." "As governments confront  hard fiscal policy decisions, the danger to central bank independence rises. We know what a lack of it is like; ask residents of Argentina and Turkey about sky-high inflation," wrote Frenkel, Rajan & Weber. "The decade of secular stagnation after the global financial crisis" "led to low inflation-adjusted interest rates, while near-zero or even negative policy rates, combined with quantitative and credit easing, kept nominal and real rates very low - and often negative both on the short and long end of the yield curve. But that easy money environment is gone," wrote Prof Nouriel Roubini. There are other unknown dangers. In Ukraine, "More than 21 months into the biggest conflict in Europe since World War Two, fighting rages with no end in sight and neither side has landed a telling blow on the battlefield." Reuters. In Gaza, the war drags on as the world and the United Nations keep wringing their hands about a looming famine (BBC) without making any effort to stop the fighting by forcing Hamas to release all hostages immediately. "We're facing monsters, monsters who murdered children in front of their parents and parents in front of their children, who raped and beheaded women, who burnt babies alive, who took babies hostages," said Israeli Prime Minister Benjamin Netanyahu in his Christmas message to Christians. Mint. Today is apparently Jesus' birthday, who forgave his enemies, (biblehub) but Christians blame Jews for his crucifixion and hide their hatred in an outpouring of sympathy for Hamas. This emboldens Iran and its proxies, like Hamas. "Attacks launched by Yemen's Houthi group on commercial ships at the southern end of the Red Sea have prompted several shipping companies to divert vessels, avoiding a route that would take them through Egypt's Suez Canal in the north and its link to the Red Sea." Reuters. Could cause inflation again. "A chemical tanker in the Indian Ocean was hit by a drone launched from Iran on Saturday (23 December), the US military says." Security firm Ambrey said "the vessel was heading from Saudi Arabia to India, and was linked to Israel." BBC. Enjoy Christmas. 2024 could be an annus horibilis (wikipedia). A real one.