June 17, 2024 — Fed Pencils in One Rate Cut for 2024


The Fed’s met last week, and they said that inflation has fallen toward their target in the last few months, but signaled they only expect to reduce rates once before the end of the year. At the start of this year, the Fed said they thought could lower rates three times in 2024. The Fed pointed out the economy has been growing at a solid pace while hiring has “remained strong.”

The Fed was more positive about the way inflation is heading, stating in recent months there has been “modest further progress” towards its 2 percent target; at the May meeting officials said there had been a “lack of further progress.” On Wednesday morning, it was reported inflation eased for a second straight month. Core inflation was up 0.2 percent from April to May, down from 0.3 percent the prior month. The number was below economists’ expectations.

The benchmark interest rate remains between 5.25- 5.5 percent, a 23-year high. The Fed will meet four more times this year, and for them to vote to cut rates, they will “need to see more good data.” Both Europe and Canada reduced rates last week, but growth in those two regions has been weaker than that in the US.