FED Interest Rate Cuts Expected: Earliest Reduction Speculated for September

  • The Federal Reserve’s cautious stance on rate cuts continues despite positive economic data suggesting inflation is beginning to cool.
  • Federal Reserve Chairman Jerome Powell and FOMC members acknowledge the declining inflation trend but emphasize the need for more affirmative data before reducing rates.
  • As the July rate decision nears, the earliest anticipated rate cut might occur in September, forecasted by various economic analysts and models.

Discover the latest insights on the Federal Reserve’s interest rate decisions and their potential impact on financial markets.

Federal Reserve Maintains Cautious Approach Despite Signs of Cooling Inflation

With positive economic indicators pointing to a decline in inflation, the Federal Reserve stands firm in its cautious approach towards reducing interest rates. Federal Reserve Chairman Jerome Powell, along with other FOMC members, has emphasized the importance of receiving more consistent economic data before making any significant adjustments. This prudent stance comes in the wake of several economic analyses predicting potential rate cuts as early as September.

September: The Earliest Possible Date for Rate Cuts

As the Federal Reserve’s July rate decision approaches, financial markets have priced in a 95.3% likelihood that the rates will remain unchanged, according to FED Watch. Looking ahead to the September 18th meeting, the probability of a 25 basis point rate cut stands at 73.6%. This cautious optimism is shared by Citi analysts, who recently updated their projections to align with this timeline.

Citi Analysts Predict a Series of Rate Cuts Starting in 2024

In light of recent economic conditions, Citi’s Chief US Economist Andrew Hollenhorst and his team forecast a series of up to eight 25 basis point rate cuts starting in September 2024. These measures aim to gradually reduce the federal interest rate from the current 5.25%-5.5% range to around 3.25%-3% by July 2025. The analysts attribute this to factors such as economic slowdown, weakening inflation, rising unemployment, and negative service sector indices.

Long-term Rate Projections and Economic Impacts

Further extending their forecast, Citi analysts anticipate that interest rates will stabilize at the 3.25%-3% range for the remainder of 2025. This expectation is based on several indicators, including a sustained decline in inflation and a cooling economy since its peak in 2023. The ongoing economic slowdown and the Federal Reserve’s cautious approach signal a period of adjustment and stabilization for the markets.

Conclusion

In conclusion, the Federal Reserve’s methodical approach to interest rate adjustments highlights a significant period of observation and analysis. While initial rate cuts may start as soon as September, the broader trajectory suggests a gradual reduction spread over several years. Understanding these developments is crucial for investors and financial professionals navigating an evolving economic landscape.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Sygnum Bank Sees Massive Growth in Bitcoin and Ethereum Trading, Reports Record First Half of 2024

Sygnum Bank, a prominent crypto bank headquartered...

Bitcoin ETF Inflows Surge as Ethereum ETFs Face Record Outflows

The crypto ETF market experienced a notable...

Ethereum ETFs See $133.16M Net Outflow on Second Day of Trading

The United States spot Ethereum...

BlackRock Ethereum ETF Surges to $277M AUM in 2 Days Despite ETH Price Drop

The launch of BlackRock's Ethereum...
spot_imgspot_imgspot_imgspot_img

PRO Analysis

Jocelyn Blake
Jocelyn Blakehttps://en.coinotag.com/
Jocelyn Blake is a 29-year-old writer with a particular interest in NFTs (Non-Fungible Tokens). With a love for exploring the latest trends in the cryptocurrency space, Jocelyn provides valuable insights on the world of NFTs.
spot_imgspot_imgspot_imgspot_img

Sygnum Bank Sees Massive Growth in Bitcoin and Ethereum Trading, Reports Record First Half of 2024

Sygnum Bank, a prominent crypto bank headquartered in Switzerland, reported a profitable first half of 2024, attributable to a sharp increase in...

Bitcoin Falls Below $64,500 Amid 3.40% Market Decline: Key Market Insights

Current trends in the crypto market have shown notable movements and regulatory discussions. The combined spot Bitcoin...

Bitcoin ETF Inflows Surge as Ethereum ETFs Face Record Outflows

The crypto ETF market experienced a notable shift on Wednesday with a resurgence in Spot Bitcoin ETF inflows. In contrast, Ethereum...