Maybe no Fed rate cuts in FY24?
A recent CNBC article [link] captured the growing concern that the US Federal Reserve’s first rate cut – the infamous “pivot” – might not happen until “at least September”, and discusses a few analysts (including those from Bank of America) who have said that there is “real risk” that the first cut might not even come until March 2025. All this comes after the Fed’s Chairman, Jerome Powell, said that there’s been a “lack of further progress” on the Fed’s fight against inflation and that it’s going to take even longer than expected to back off the high rates needed to contain the inflationary risk. Analysts in the article point to Mr. Powell’s desire to see sustained evidence of inflation’s demise across consecutive months, with one analyst from Moody’s saying that even if the US saw three straight months of 2% or lower inflation, the earliest the Fed could begin cutting rates would be five months from now in September.
