Fed meeting minutes indicate interest rate cuts could be coming in 2024
UBS Private Wealth Management financial adviser Sarah Ponczek and Lou Basenese discuss how rising interest rates and inflation are impacting markets on 'Mornings with Maria.'
Federal Reserve officials agreed during their December policy-setting meeting that interest rates are likely at their peak amid recent declines in inflation – and that rate reductions may be warranted in 2024.
Minutes from the U.S. central bank's Dec. 12-13 meeting released Wednesday showed that central bank officials are mostly optimistic about the path of inflation, and expect to begin reducing rates sometime this year.
«In discussing the policy outlook, participants viewed the policy rate as likely at or near its peak for this tightening cycle, though they noted that the actual policy path will depend on how the economy evolves,» the meeting minutes said.
FED SKIPS AN INTEREST RATE HIKE, BUT HIGH MORTGAGE RATES COULD BE HERE TO STAY
Federal Reserve Chair Jerome Powell attends a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Sept. 21, 2022. (Chen Mengtong/China News Service via Getty Images / Getty Images)
Officials voted at the meeting to hold interest rates steady at a range of 5.25% to 5.5%, the highest level since 2001. But policymakers also opened the door to multiple rate cuts in 2024 amid signs the economy is beginning to slow in the face of tighter monetary policy.
Updated quarterly economic projections laid out after the meeting showed that a majority of Fed officials who participated in the meeting expect rates to fall to 4.6% by the end of 2024, suggesting there will be at least three quarter-point rate cuts next year. Policymakers also penciled in additional rate cuts in 2025 and 2026.
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