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Federal Reserve's Reluctance to Cut Interest Rates in 2024 Amid ...
2024-04-28 23:57:08

Federal Reserve's Reluctance to Cut Interest Rates in 2024 Amid Resurging Inflation

The Federal Reserve may delay interest rate cuts in 2024 due to signs of increasing inflation, diverging from investors' expectations. Despite slowing economic growth, stronger-than-expected inflation figures have shifted projections.

The US is anticipated to cut rates later than Europe, with inflation rates showing a slight rise in March. Federal Reserve's preferred inflation gauge remained steady in March, potentially affecting stock markets and future rate cut speculations.

Jerome Powell's remarks are awaited to confirm the Federal Reserve's stance on maintaining higher borrowing costs due to persistent inflation and a robust labor market.

Related news on that topic:

U.S. Economy Faces Growth Slowdown Amid Inflation Concerns

The U.S. economy experienced a growth slowdown in the first quarter of 2024, expanding at a 1.6% rate due to higher prices and weaknesses in various sectors, leading to concerns of stagflation. Despite robust consumer spending, underlying indicators suggest a solid economy with limited weaknesses overall. The Federal Reserve's cautious stance on interest rate decisions amidst rising inflation and stubborn inflation levels above the 2% target further complicates the economic outlook, with expectations for rate cuts shifting towards the end of the year. Market reactions indicate skepticism towards immediate rate reductions, anticipating a potential delay in easing monetary policy.

Understanding the Impact of Inflation on US Economic Growth and ... Cut Expectations

The recent headlines highlight a significant slowdown in US economic growth to a nearly two-year low, accompanied by a spike in inflation rates exceeding expectations. This combination raises concerns about stagflation, leading to doubts about potential interest rate cuts by the Federal Reserve. With inflation pressures persisting and growth decelerating, the Fed is cautious about reducing rates, impacting market expectations. The Fed's preferred inflation gauge, the Personal Consumption Expenditures index, has shown a persistent rise, exceeding Wall Street's expectations and dampening hopes for rate cuts this year. As inflation remains above the 2 percent target, the Fed may postpone rate cuts, potentially reassessing future decisions and delaying any cuts until later in the year. Market experts suggest that rate cuts, if any, may not occur until late 2024, affecting investors' bets and stock market dynamics.

Read 9 more recent news on this topic

The press radar on this topic:

The Street
29. April 2024 um 12:46

Thought the Fed would give us an interest-rate break in '24? Think again

Finance
Economy
The Federal Reserve may be reluctant to cut interest rates in 2024 due to signs of resurgence in inflation. The first-quarter Gross Domestic Product report showed slowing economic growth but stronger-than-expected inflation. Investors and traders were expecting rate cuts, but now the betting is maybe two, with the first in November.
The Street
29. April 2024 um 22:46

Fed inflation gauge holds steady in March, boosting stocks on rate cut bets

Economy
Finance
The Federal Reserve's preferred inflation gauge held steady in March, with core prices rising at an annualized rate of 2.8%, the slowest in three years. Markets are considering potential rate cuts for 2024, but experts suggest that any cuts may come towards the end of the year after analyzing more inflation reports.
Yahoo Finance
28. April 2024 um 12:15

Powell Is Poised to Keep Fed on Higher-for-Longer Path

Finance
Economy
Investors are eagerly awaiting Jerome Powell's remarks this week to gauge the Federal Reserve's stance on interest rate cuts. Powell's previous comments indicated that the Fed would keep borrowing costs high for an extended period due to persistent inflation and a strong labor market. With stubborn underlying inflation and expectations for a robust employment report, it is unlikely that Powell will deviate from this stance. The article also highlights upcoming economic data releases and central..
Kinh doanh - VnExpress
28. April 2024 um 17:00

Reasons why the US is expecting to cut interest rates after Europe

Economy
Finance
The US is expected to cut interest rates in September, three months later than Europe, due to its stronger economy. Inflation has decreased on both sides of the Atlantic, but the rate of decline in the US has slowed. The Personal Consumption Expenditures (PCE) index, the Federal Reserve's preferred inflation measure, reached 2.7% in March, up 0.2% from February's 2.5%.
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