NEW YORK, Jan 24 Reuters A strong U.S. economy and pushback from central bank officials is leading some investors to rethink their bets on how quickly the Federal Reserve will cut rates this year, a shift that is rippling through Treasury and foreign exchange markets even as stocks sit near record highs.

Expectations that the Fed would ease monetary policy in 2024 after its most aggressive tightening cycle in decades fueled an explosive rally in stocks and bonds in the final months of last year, boosting the SP 500 to an annual gain of more than 24.

Investors still believe rate cuts are coming, but some have started to question when the Fed will begin lowering borrowing costs and how quickly it will move. While the SP 500 has notched a fresh record high this month, Treasuries have pared some of their gains and the dollar has perked back up as a result.

Comments following the Feds Jan 3031 policy meeting next week could shed more light on how the central bank views the recent strength in the economy and its timing for rate cuts.

Markets seemed to be seeing the Fed through rosecolored glasses to end 2023, said Helen Given, FX trader at Monex USA in Washington. With the new year, price expectations have begun to shift.

A dovish pivot at the Fed39;s monetary policy meeting in December bolstered investor hopes that the central bank39;s tightening cycle was over and rate cuts were approaching.

More recently, several officials have pushed back against the perception that…