What’s Next for Rate Cuts? The Fed Is Watching Jobs and Prices.

Published On Sep 20, 2024, 2:13 PM

Federal Reserve Governor Christopher J. Waller indicated that the Fed might implement two more interest rate cuts this year if economic data remains stable. The cuts could occur in quarter-point increments at the upcoming meetings in November and December. However, the Fed is also cautious; if inflation rises or job market conditions worsen unexpectedly, they could expedite these cuts. The recent half-point cut has surprised many, making it unclear how quickly the Fed will act further as they aim to normalize interest rates that have been elevated for the past couple of years.

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The expectation of additional rate cuts by the Fed typically signals a more favorable economic environment for growth and can positively impact sectors reliant on lower borrowing costs, such as real estate and consumer discretionary. Moreover, financial institutions may benefit from a more predictable interest rate environment.

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