The Fed will continue to cut rates

Mon, 09/30/2024

by Ellie LeTu

Source: WSJ

• The Fed cut 50bps last time

  • Rates now sit at 4.75% - 5.00%, down from a two decade high.

  • The first rate reduction since 2020.

• Jerome Powell’s comments on soft landing

  • The Fed feels no need to cut rates hastily - feels economy is in a solid spot.

  • Officials focused on bringing rates down to a level that “neither spurs nor slows economic activity”.

• Another rate cut expected at the next Fed meeting

  • Two more Fed meetings in 2024.

  • A 25bps rate cut is expected to take place at each meeting.

  • With inflation falling precipitously over the past two years, the Fed has shifted its focus to supporting full employment and the economy.