Now that there’s a growing consensus that the Federal Reserve is done raising interest rates — a shift I predicted last month — it’s time to ponder when policymakers will consider cutting rates and by how much.

It’s common to think that wouldn’t happen until inflation returns to the Fed’s 2% target or the risk of recession is elevated. The first rate cut should and will happen sooner than that and not because of a dramatic slowdown in the economy. Given how the labor market and inflation have evolved, cutting rates by 50 basis points in the first half of 2024 would serve to preserve the expansion while maintaining a policy stance that’s at least somewhat restrictive and continuing to put downward pressure on prices.

QOSHE - The Case for Two Fed Rate Cuts in Early 2024 Is Building - Conor Sen
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The Case for Two Fed Rate Cuts in Early 2024 Is Building

18 1
17.11.2023

Now that there’s a growing consensus that the Federal Reserve is done raising interest rates — a shift I predicted last month — it’s time to ponder when policymakers........

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