On Wall Street, interest rate cuts have recently become less a question of if, but rather, when. Two of 19 Federal Reserve officials predicted the central bank would cut interest rates at least once in the coming year, according to the Fed’s latest Summary of Economic Projections. While most officials believe there will be a total of three rate cuts in 2024, one Fed official is penciling in five.
The last time the Fed cut rates was at the onset of the pandemic. Over a series of emergency meetings in March 2020, the Fed took the unprecedented step of slashing interest rates by 1.25 points, which brought rates to near-zero levels. The Fed explained the cuts needed to counter the dangers Covid posed to the economy.
The “FOMC” kept the reference rate unchanged for the fourth consecutive time, that is, between 5.25% and 5.5%, after 11 staggered increases since 2022. It will not be until mid-January of next year when the committee meets again to announce its next moves.
Last November, the inflation rate increased by 3.1% compared to the same month in 2022 but fell one tenth of a percentage point compared to October, the United States Bureau of Labor Statistics (BLS) reported this Tuesday.
Likewise, among the projections, the growth in the Gross Domestic Product (GDP) barely changed from the estimates presented in September, projecting growth in the US economy of 1.4% in 2024, 1.8% for 2025 and 1.9% in 2026. Furthermore, the consensus projection of the unemployment rate was 4.1% for the next three years.
