Fed Signals Potential Interest Rate Cuts Later in 2024

Federal Reserve officials, including Boston Fed President Susan Collins, indicate a cautious approach towards reducing interest rates, pending further evidence of sustained inflation control.

• Boston Fed President Susan Collins emphasizes the need for more evidence of inflation aligning with the 2% target before considering interest rate cuts.
• Fed Chair Jerome Powell suggests that the necessary confidence in inflation's trajectory for rate cuts may not be reached by the March meeting.
• Economic indicators such as reduced job turnover and a slowdown in capital goods spending hint at a balancing of inflation and economic activity risks.
• The Fed's preferred inflation measure, the core personal consumption expenditures price index, showed progress with a 2.9% year-on-year pace in December.
• Collins highlights the potential for higher medium-term bond yields and the importance of monitoring the rapidly evolving private credit market.

3 Articles

mint Financial Post Boston Globe