Will the Federal Reserve cut interest rates in 2024?

foxbusiness.com:

Economist Peter Morici reacts to the Fed signaling that it could cut interest rates three times in 2024, on 'Varney & Co.'

The Federal Reserve is set to begin the New Year after it signaled that a momentous shift in monetary policy is underway amid signs that high inflation is finally beginning to ease. 

During their final meeting of the year earlier in December, central bank policymakers signaled that a nearly two-year battle against inflation is finally coming to an end in a long-awaited policy pivot. In addition to holding rates steady for the third month straight, Fed officials forecast a series of interest rate cuts in 2024 as inflation falls faster than expected.

«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,» Chair Jerome Powell told reporters after the meeting. «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.» 

New quarterly economic projections laid out after the meeting show that a majority of FOMC 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.

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 recent efforts by Fed policymakers to temper expectations. About 88% of investors are currently pricing in at least a quarter-point cut in March, according to the CME Group's FedWatch