The Fed's Accelerated Rate Cuts: A Guide for Investors
Wednesday, 18 September 2024, 06:19
The Fed's Rate Cut Forecast
Wall Street sees the Fed cutting interest rates at the next seven meetings stretching out to July 2025. And maybe even a few more cuts after that.
The Fed’s short-term rate, now at 5.25% to 5.5%, could be reduced to as low as 3% or even a smidgen lower by the end of next year, Wall Street predicts.
Possibility of Aggressive Cuts
- Some economists think this approach may be too aggressive.
- The economy is still in good shape.
- Excessive rate cutting could reignite inflation.
The Fed’s so-called dot plot, published at 2 p.m., will lay out the path the central bank expects to take.
Shifting Predictions
Just a few months ago, in June, the Fed only forecast one rate cut this year and four in 2025.
- That forecast is sure to get junked.
- Inflation has cooled considerably.
- The labor market has weakened.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.