The Fed Will Stop Increasing Interest Rates Again. A number of chief economists at America’s largest banks estimate that the Federal Reserve has finished raising interest rates and may lower them by around one percentage point in 2024.
According to the latest estimates by the American Bankers Association’s Economic Advisory Committee, although the United States (US) will probably avoid a recession, economic growth is likely to slow significantly in the next few quarters. This can increase unemployment and at the same time reduce inflation.
The Fed Will Stop Increasing Interest. The Fed is expected to keep interest rates steady at its meeting next week. However, investors differ on whether the US central bank will follow through on raising interest rates at the end of 2023.
The ABA’s advisory committee, which includes economists from JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. convey their projections regularly to Fed Chair Jerome Powell along with members of the Fed board in Washington.
According to their median projection, the committees see economic growth slowing to less than a 1 percent annual rate in the next three quarters, in response to the Fed’s past interest rate increases and tightening credit conditions.
Then, unemployment is projected to rise to 4.4 percent at the end of 2024. This estimate is up from 3.8 percent in August 2023. Inflation is also expected to fall to 2.2 percent on an annual basis, from the previous 3.2 percent in July 2023 .