When will the Federal Reserve start to cut interest rates?

foxbusiness.com:

The Kobeissi Letter editor-in-chief Adam Kobeissi discusses market expectations for 2024 after the Dow Jones pulled back from a record high on 'Cavuto: Coast to Coast.'

The Federal Reserve ended 2023 with an unexpected pivot in policy. 

Central bankers signaled in December during their final meeting of the year that their nearly two-year battle against inflation has finally come to an end – and that a series of rate reductions are in the pipeline.

Updated quarterly economic projections laid out after the meeting show that a majority of Federal Open Market Committee officials expect rates to fall to 4.6% by the end of 2024, suggesting that there will be at least three quarter-point rate cuts next year. Policymakers also penciled in additional rate cuts in 2025 and 2026.

«We are seeing strong growth that appears to be moderating, we're seeing a labor market that is coming back into balance by so many measures, and we're seeing inflation making real progress,» Fed Chair Jerome Powell told reporters last month. «These are the things we've been wanting to see. We still have a ways to go. No one is declaring victory. That would be premature, and we can't be guaranteed of this progress.» 

FED'S FIGHT AGAINST INFLATION IS WEIGHING ON MIDDLE-CLASS AMERICANS

But traders are betting on even more aggressive rate cuts, starting as early as March, despite a hotter-than-expected inflation report and recent efforts by Fed policymakers to temper expectations. About 71.4% of investors are currently pricing in at least a quarter-point cut in March, according to the CME Group's FedWatch tool, which tracks trading.

«We entered 2023 worried about inflation and how many more times the Fed was going to raise rates,» said Chris Zaccarelli,