AFMC - Federal Reserve Policy Rate Path: An Evolving Picture

2024-04-12 20:50:00 ET

Summary

• Stubbornly strong economic data has led to significant shifts in market expectations for when, and how quickly, the Federal Reserve will begin cutting policy rates.
• Our own forecast is now for the first rate reduction to come in September, but the complications of starting an easing cycle just before the U.S. Presidential election does insert significant uncertainty.
• Financial market expectations have now shifted from six rate cuts to just two cuts this year – fewer cuts than the Fed’s own projections.

Stubbornly strong economic data has led to significant shifts in market expectations for when, and how quickly, the Federal Reserve will begin cutting policy rates. ...

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