The U.S. economy is “back to normal” for the first time in two decades, but the market is getting ahead of the likely pace of interest rate cuts, according to IBM Vice Chairman Gary Cohn.

The market is narrowly pricing a first rate reduction from the Federal Reserve in May 2024, according to CME Group’s FedWatch tool, with around 100 basis points of cuts expected across the year.

The central bank in September paused its historically aggressive monetary tightening cycle with the Fed funds rate target range at 5.25-5.5%, up from just 0.25-0.5% in March 2022.

Cohn — who was chief economic advisor to former U.S. President Donald Trump from 2017 to 2018 and is a former director of the National Economic Council — does not see the Fed starting to unwind its position until at least the second half of next year, after similar moves from other major central banks that began hiking sooner.

“You don’t want to be early to leave when you’re the last one to come to the party. You have to be the last one to leave the party, so the Fed is going to be the last one to leave this party,” Cohn told CNBC’s Dan Murphy on stage at the Abu Dhabi Finance Week conference on Wednesday.

“The economy will clearly turn down before the Fed had starts to cut interest rates, so I strongly believe that for the first half of ’24, we will see no rate activity in the Fed. Maybe [in the third quarter], we’ll start hearing rumblings of some forward guidance of lower rates.”

The U.S. consumer price index increased 3.2% in October from a year ago, unchanged from the previous month but down considerably from a pandemic-era peak of 9.1% in June 2022.

Despite the sharp rise in interest rates, the U.S. economy has so far remained resilient and avoided a widely predicted recession, fueling bets that the Fed can engineer a fabled “soft landing” by bringing inflation down to its 2% target over the medium term without triggering an economic downturn.

Cohn highlighted that U.S. consumer debt has soared to record highs of over $1 trillion, and that consumer spending is persisting despite tightening financial conditions. He said the consumer and the broader economy is “back to a normal, but we all forgot what normal is.”

“We haven’t seen normal for over two decades. We went through a decade plus of zero interest rates, we went through a decade of quantitative easing, zero interest rates and the Fed trying to see if they could create inflation,” he said.

“We’ve gone from the Fed not being able to create inflation — we now know the answer, the Fed can’t create inflation, but the market can — to us trying to unwind a shorter term inflationary shock. We’re back into a normal world.”

He noted that the 100-year average for 10-year U.S. Treasury yields is around 4.5%, and that the 10-year yield has moderated from the 16-year high of 5% logged in October to around 4.3% as of Wednesday morning. Meanwhile, inflation is “running back towards the mean” of between 2% and 2.5%.

“So every piece of economic data, if you look, is sort of heading back towards its very long term average. If you look at these over 100-year generational cycles, we seem to be running into that phase right now,” Cohn added.

Intel shares slid by as much as 7% in extended trading on Thursday after the chipmaker issued fourth-quarter results that failed to meet analysts’ estimates and gave a weaker-than-expected forecast.

Here’s how the company did:

Earnings: 10 cents per share, adjusted, vs. 20 cents per share as expected by analysts, according to Refinitiv.Revenue: $14.04 billion, vs. $14.45 billion as expected by analysts, according to Refinitiv.

Intel’s revenue declined 32% year over year in the quarter that ended Dec. 31, according to a statement. It’s the fourth consecutive quarter of falling sales as the market for personal computers retreats from the Covid boom.

The company recorded a $664 net loss, compared with a profit of $4.62 billion in the year-ago quarter.

Investors can expect more pain in the first quarter. Intel called for adjusted net loss of 15 cents per share on $10.5 billion to $11.5 billion in revenue. Analysts polled by Refinitiv had expected earnings of 24 cents per share and $13.93 billion in revenue.

“In 2023, we will continue to navigate the short-term challenges while striving to meet our long-term commitments, including delivering leadership products anchored on open and secure platforms, powered by at-scale manufacturing and supercharged by our incredible team,” Intel CEO Pat Gelsinger said in the statement. For at least the first half of the year, Intel will deal with “persistent economic headwinds,” the company said in a presentation on its results.

In the fourth quarter, Intel’s Client Computing Group, which includes PC chips, contributed $6.63 billion in revenue, down 36% and below the $7.68 billion consensus among analysts polled by StreetAccount. Gartner said the PC market shrank more sharply than any quarter since it began following the industry in the 1990s.

The Datacenter and AI segment, consisting of server chips, memory and field-programmable gate arrays, recorded $4.30 billion in revenue, down 33% but still more than the $4.17 billion consensus from StreetAccount.

Intel’s Network and Edge segment, containing networking products, posted $2.06 billion in revenue. That’s 1% less than in the year-ago quarter, and lower than the $2.26 billion StreetAccount consensus.

During the quarter, Mobileye, an autonomous driving hardware and software supplier that Intel acquired for $15.3 billion in 2017, debuted on the Nasdaq. Intel still controls most of the voting power of Mobileye’s common stock.

Intel said that in January it lengthened the useful life of some equipment from five years to eight years, which will boost 2023 gross profit by $2.6 billion. That move is separate from the $3 billion cost-savings plan for 2023 Intel announced in its earnings statement in October. Amazon and Microsoft have made similar accounting adjustments for their server and networking equipment in recent years, and IBM on Wednesday followed suit.

Intel stock has slid about 42% in the past year, while the S&P 500 index is off by 7% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: AMD and Intel are priced like they’re going out of business, says Keith Fitz-Gerald

JPMorgan Chase has hired a Singapore-based quantum-computing expert to be the bank’s global head for quantum communications and cryptography, according to a memo obtained by CNBC.

Charles Lim, an assistant professor at the National University of Singapore, will be focused on exploring next generation computing technology in secure communications, according to the memo from Marco Pistoia, who runs the bank’s global technology applied research group.

Lim is a “recognized worldwide leader” in the area of quantum-powered communications networks, according to Pistoia.

Hired from IBM in early 2020, Pistoia has built a team at JPMorgan focused on quantum computing and other nascent technologies. Unlike today’s computers, which store information as either zeros or ones, quantum computing hinges on quantum physics. Instead of being binary, qubits can simultaneously be a combination of both zero and one, as well as any value in between.

The futuristic technology, which involves keeping hardware at super-cold temperatures and is years away from commercial use, promises the ability to solve problems far beyond the reach of today’s traditional computers. Technology giants including Alphabet and IBM are racing toward building a reliable quantum computer, and financial firms including JPMorgan and Visa are exploring possible uses for it.

“New horizons are going to become possible, things we didn’t think would be possible before,” Pistoia said in a JPMorgan podcast interview.

In finance, machine-learning algorithms will improve to help fraud detection on transactions and other areas that involve “prohibitive complexity,” including portfolio optimization and options pricing, he said.

Drug development, materials science for batteries and other areas will be transformed by the dramatically advanced computing, he added.

But if and when the advanced computing technology becomes real, the encryption techniques that underpin the world’s communications and financial networks could immediately be rendered useless. That has spurred the study of next generation quantum-resistant communication networks, which is Lim’s area of expertise.

New forms of cryptography and secure messaging are needed ahead of quantum supremacy, or the point when quantum computers are able to perform calculations beyond the scope of traditional computers in any reasonable time frame, Pistoia said during the podcast.

That could happen by the end of the decade, he said.

The quantum advantage precedes that development and could happen as soon as two or three years from now, he said. At that point the new computers are more powerful and accurate than today’s versions but they are competitive.

“Even now that quantum computers are not yet that powerful, we don’t have so much time left,” Pistoia said in the podcast. That’s because bad actors are already preserving private communications to attempt to decrypt it later when the technology allows for it, he said.

Lim will “pursue both foundational and applied research in quantum information, focusing on innovative digital solutions that will enhance the security, efficiency, and robustness of financial and banking services,” Pistoia said in the memo.

Lim is a recipient of the National Research Foundation Fellowship in Singapore and won the National Young Scientist Award in 2019 for his work in quantum cryptography, said Pistoia.

Last year, Lim was asked to lead his country’s effort to create quantum-resistant digital solutions, and he has been involved in international efforts to standardize quantum-security techniques, Pistoia added.