3 rate cuts in 2024 would be a 'surprise,' former Fed president Thomas Hoenig says

• Former Fed president Thomas Hoenig said he'd be surprised if officials deliver three rate cuts in 2024.
• One or two is more likely amid stubborn inflation and a strong economy.

The Federal Reserve at the end of last year indicated that it could cut interest rates three times in 2024, but such a move would come as a "surprise" given current economic conditions, according to former Kansas City Fed President Thomas Hoenig.

"I think three cuts would be a surprise now, probably one or two, as the economy continues to slow as they expect at least," the former Fed Chair said on CNBC's "Squawk on the Street" on Tuesday.

The factors baked into his forecast include a resilient economy, stubbornly high inflation over 3%, robust consumer spending, and low unemployment.

"[The Fed's] balance sheet still provides a fair amount of liquidity into the market. And that factor, I think, shouldn't be forgotten as we go forward from here," Hoenig said.

Fed Chair Jerome Powell has pushed back against the market's predictions of imminent loosening of monetary policy but maintained that he sees three cuts this year in a recent "60 Minutes" interview following the December meeting of the Federal Open Market Committee.

Hoenig also said that a preemptive rate cut to curb a potential recession wouldn't be the right move, even in the face of regional bank stress and commercial real estate turmoil.

The recent rise in inflation has flipped the script on earlier predictions of rate cuts coming as early as March. Optimistic market forecasters are placing the first rate cut sometime in the middle of this year, while others say the Fed may not cut until well into the second half or even keep rates high through all of 2024.