The Federal Reserve may still be on course for three interest rate cuts in 2024, but that doesn't mean officials are wholly committed to traveling this path. Markets (^DJI, ^IXIC, ^GSPC) and regulators are searching for signals from the latest batch of inflation data.

John Hancock Investment Management Co-Chief Investment Strategist Emily Roland believes markets may be caught off guard when the Fed finally implements its monetary policy while fending off inflationary pressures.

"One thing that's a little bit different than what you may be hearing is that once the Fed does start to cut, we think those cuts are going to be a lot more severe than investors anticipate. In fact, if you look back at the last five Fed rate-cutting cycles, the Fed cuts on average 17 times," Roland tells Yahoo Finance. "Usually there's something wrong when the Fed is cutting, so that's something we would be thinking about as investors today."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: What are your expectations for the Fed, Emily? When do you think they can start cutting? You know, Ed Yardeni now I saw in a note to his clients, he's thinking-- his base case is still two cuts. But later in the year, Emily, he's seeing November and December. He also told his clients, though, listen, he wouldn't be surprised if you get no cuts this year. How are you all thinking about it?

EMILY ROLAND: I'd say that wouldn't totally surprise us either. You know, I was hastily refreshing the CME FedWatch tool after this morning's manufacturing data. And the market is still pricing in a cut for June and three cuts over the course of this year. The probability of a June cut went down a little bit, but that's where the market odds right now are. And in our view, I think it's going to be tough to make the case that the Fed can start cutting in June. You've got, again, prices paid Julie mentioned in the data this morning elevated. You know, we'll find out how wage growth looks in the jobs report on Friday. But if inflation continues to be sticky, it's taking a while to get down to the Fed's 2% target here.

We've seen progress on disinflation sort of stalling over the last few months here. We think that rate cuts may be later in the year. Now, one thing that's a little bit different than what you may be hearing is that once the Fed does start to cut, we think those cuts are going to be a lot more severe than investors anticipate. In fact, if you look back at the last five Fed rate cutting cycles, the Fed cuts on average 17 times. Usually there's something wrong when the Fed is cutting. So that's something that we would be thinking about as investors today.