The Fed could make three interest rate cuts in 2024

The Fed's projections for 2024 remain at three cuts during the year, although they do not stop considering that changes in the inflation rate could affect these estimates

The Fed’s cut projections for 2024 and 2025 could be affected by the current variations in inflation in the United States.

According to a group of economists surveyed by Bloomberg, “the recent spike in inflation is unlikely to change Federal Reserve (known as the Fed) members’ projections of three interest rate cuts this year and four next year. 2025.”

A significant number of the 49 specialists surveyed between March 8 and 13 “believe that Fed officials foresee three or more cuts in 2024, while more than a third expect two or fewer.”

It is important to note that “the Federal Open Market Committee (FOMC) will keep rates in the range of 5.25 % to 5.5 % for the fifth consecutive meeting” this week, and the first-rate reduction will take place in the month of June.

For his part, the president of the Fed, Jerome Powell, and his colleagues will be analyzing their economic and rate projections at the meeting today, March 19, and tomorrow, March 20, for the first time since December. The specialists surveyed consider that only small adjustments are made to what they already have estimated.

However, they venture to point out that the United States monetary authorities “will revise upward their forecasts for 2024 for the gross domestic product of the United States, from an annual rate of 1.4 % to 1.7 %, and will raise their projection inflation from 2.4 % to 2.5 %.”


Source: finanzasdigital

(Reference image source: Aditya Vyas on Unsplash)

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