The Fed still expects three rate cuts in 2024 despite persistent inflation and a stronger economy

The Federal Reserve kept interest rates unchanged on Wednesday, but policymakers indicated they still expect to cut them by 0.75 percentage points by the end of 2024, despite harder-than-expected progress toward the 2% inflation target of the US central bank.

The Fed’s new monetary policy statement describes inflation as still “elevated” and updated quarterly economic projections show the median expectation that the core PCE index, excluding food and energy, will rise at a rate of 2.6% by the end of the year. for the year, compared to the 2.4% of projections released in December.

However, 10 of 19 Fed officials still expect the policy rate to fall by at least 0.75 percentage points by the end of this year, a median view first set in December and held despite recent stronger inflation than expected.

Source: Terra

Rose

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