Federal Reserve interest rate cuts ahead: A historic look
A Federal Reserve official on Thursday raised the possibility the central bank may not cut interest rates at all in 2024, deflating Wall Street's expectations that several reductions could be in store later this year.
"If we continue to see inflation moving sideways, it would make me question whether we needed to do those rate cuts at all," said Federal Reserve Bank of Minneapolis President Neel Kashkari in an interview with Pensions & Investments magazine that was broadcast on LinkedIn.
Kashkari, who said he had previously predicted two rate cuts this year, added, "If we continue to see strong job growth, strong consumer spending and strong GDP growth, then that raises the question in my mind, "Well, why would we cut rates?' Maybe the dynamics we have right now are sustainable."
Kashkari's comments come a day after Fed Chair Jerome Powell said the central bank is likely to lower its benchmark rate later this year, providing relief to consumers and businesses paying sharply higher borrowing costs after 11 rate hikes in two years. But inflation has remained stubbornly above 3% this year, even picking up speed in February, prompting Powell to caution the Fed is wary of cutting rates too quickly.
"What Kashkari did was deliver a cruel potential reality for the market — that inflation remains stubborn — and the Fed, not wanting to repeat the policy errors of the 1970s, may be forced to retreat from suggesting a rate-easing cycle," Quincy Krosby, chief global strategist for LPL Financial, said in an email.
Sticky inflation and stronger-than-expected economic data "keeps the Fed speakers on higher alert, such as Khaskari, who said he penciled in two rate cuts in the dot plot but keeps the option of 'no cuts' if inflation stalls," noted Ben Emons, senior portfolio manager at NewEdge Wealth in a research note.
Emons noted that stocks took a dive after Kashkari's 2 p.m. ET interview as investors digested the possibility of no rate cuts in 2024. The S&P 500 shed 1.2%, while the Dow Jones Industrial Average lost 1.4%.
#finance #crypto #cryptocurrency #federalreserve #federalreservebank #blockchain #ethereum
-
DVR
RealAmericasVoice
2 hours agoNEXT MAN UP: STEVE BANNON, CHARLIE KIRK, AND JACK POSOBIEC
17.5K18 -
1:16:29
The Late Kick with Josh Pate
5 hours agoLate Kick Live Ep 526: FSU’s ACC Exit | SEC vs Texas & OU | Lanning Is Kirby | EASports CFB25
8.46K -
LIVE
Due Dissidence
9 hours agoLiberals' Post-Debate MELTDOWN CONTINUES, Russ Interviews 'Pod Save America' Fans in NYC
3,034 watching -
27:33
Texas Strong
2 days agoThe Texas Revolution - Episode 01 - 06-28-24
14.9K3 -
LIVE
Vigilant News Network
7 hours agoMedia Blackout: 10 News Stories They Chose Not to Tell You - Episode 29
1,881 watching -
43:19
Stephen Gardner
6 hours ago🔴BREAKING: Biden is a TRAIN WRECK! Obama WANTS him GONE!!
49.8K150 -
7:32:40
FusedAegisTV
10 hours agoDid I Crash Servers?! Wonderous Tails XP Farming | Final Fantasy XIV 7.0 Early Access Day 3
51.2K2 -
1:43:48
Bright Insight
1 day agoWhat You Must Know about Graham Hancock/Flint Dibble Debate (w/ @DeDunking)
134K90 -
47:41
Digital Social Hour
13 hours agoLiving Longer and Healthier with Gary Brecka | Digital Social Hour
62.2K16 -
19:52
The Nima Yamini Show
11 hours agoLondon Unites: Massive March Against Biased Policing
42.6K11