The Fed Will Wait to Cut Interest Rates. Chairman of the United States (US) Fed, Jerome Powell, said that policymakers would wait after March 2024 to cut the benchmark interest rate. Powell expressed this by emphasizing that Fed officials wanted to see more economic data to ensure inflation was on track to 2%.
Powell and the Fed think that the wise thing to do is to give it time and see the data continue to confirm that inflation is falling to 2% in a sustainable manner. Regarding the inflation path at the March 19-20 2024 meeting, he also believes that it is unlikely that the Federal Open Market Committee (FOMC) will reach that level of confidence,
The Fed Will Wait to Cut Interest Rates. Meanwhile, Powell also commented by emphasizing the possibility that bond investors had overstepped their bounds in predicting rapid interest rate cuts, resulting in bond prices falling in Asian markets.
Powell also said he did not expect policymakers to dramatically change interest rate forecasts next year. According to a survey in December 2023, based on median estimates, the majority expect the reference loan interest rate to reach 4.6% by the end of 2024.
However, it tries to choose the right time, increasing the overall context. On the other hand, Powell also reiterated comments he has made in the past, that Fed officials do not include political or election factors in their policy decisions. Powell said his party had never done so, and would not do so.
