Fed Signals Interest Rate Cuts in 2024

On Wednesday, the Federal Reserve kept the interest rate in the 5.25%-5.50% area without any change at the end of its meeting that began one day ago, which was in line with market expectations.

The central bank has been holding the interest rate at these levels since July 2023, when the Fed stopped hiking interest after a series of interest decisions that raised key rates to historically high levels as part of the battle against inflation.

The interest statement indicated that members of the Federal Open Market Committee expect to cut interest rates three times – by 25 basis points each time – in 2023, which indicates the possibility that we will see the first cut in the federal interest rate since March 2022.

The current interest rate is at a 23-year high, a benchmark rate at which interest has now been in place for about six months.

The Federal Open Market Committee’s rate forecasts – which are based on the committee’s 19 members voting on possible future interest rate moves – indicated the possibility of three rate cuts this year.

However, the committee’s vote did not clarify the timing of potential rate cuts that are expected to occur during the remainder of 2024.