The Federal Reserve will cut interest rates in 2024.
outperformed expectations in 2023, and economic activity in the first quarter of 2024 signals continued solid economic growth. That backdrop coupled with a very strong stock market and continued elevated wage
Fed Chairman Jerome Powell in his Wednesday testimony before the House Financial Services Committee explained that the first rate cuts, which were expected this month, will come later than anticipated. The marketthe first cut coming in June or July. Because economic growth is more resilient than expected and because wage inflation remains somewhat elevated, the Fed will likely only reduce rates by about 0.5% from the current level of around 5.38%. The market is too optimistic. Itrate cuts of 0.
With interest rates at 5.38%, monetary policy is restrictive. Policy is reducing economic growth. To ensure that nothing breaks in the economy, the Fed will begin the slow process of reducing rates sometime this summer. It is important to remember that monetary policy affects the economy with a long and variable lag. Even after one or two rate cuts of 0.25% each, policy will be restrictive with the effects of slower growth and lower inflation.
Over the coming months, more data will confirm the economy is slowing and that inflation is continuing to fall. The manufacturing sector hasthis week showing that low-income households are being squeezed hard by elevated rates for vehicle loans and by rising rates on credit card debt. Delinquencies and defaults are rising.
James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Rock & Roll Hall of Fame Unveils 2024 NomineesRock Hall Nominees: 2024 Rock & Roll Hall of Fame contenders for the Class of 2024.
Weiterlesen »
Comparison: 2024 Cadillac Lyriq vs 2024 Genesis Electrified | Car ReviewsHow to choose between the 2024 Cadillac Lyriq and 2024 Genesis Electrified GV70? Auto123 compares two impressive new luxury EVs.
Weiterlesen »
2024 Lucid Air, 2024 Rezvani Beast: Car News HeadlinesLucid's latest pricing, Rezvani's redesigned Beast, and a major update for Super Cruise all made headlines today.
Weiterlesen »
2024 Toyota Land Cruiser 2024 pricing announcedGet in-depth info on the 2021 Toyota Land Cruiser including prices, specs, reviews, options, safety and reliability ratings.
Weiterlesen »
Spring Summer 2024 2024 / 2025 » Fashion AllureLatest Fashion Trends, Shoes and Accessories, Celebrity Style
Weiterlesen »
Comparison: 2024 Chevrolet Trax vs 2024 Kia Seltos | Car ReviewsHow to choose between the 2024 Chevrolet Trax and the 2024 Kia Seltos? Both offer tons of positives, but your choice may come down to three letters: AWD.
Weiterlesen »