FOMC to cut rates five times in 2024 – TDS
|New Fed call: economists at TD Securities are now looking for the FOMC to cut rates by five times this year starting in May.
May is the most likely meeting where the Fed can begin easing policy
Notable shifts in the macro data and the Fed's likely bent to ease preemptively have led us to assign greater odds to a softer landing scenario for the US economy this year. In this context, we are now looking for the FOMC to cut rates five times in 2024, with the Fed funds rate ending the year at 4.00%-4.25%. We continue to expect the Fed will reach its neutral policy stance at 2.75%-3.00% by the end of 2025.
Given our still very constructive outlook for inflation, we still think that May is the most likely meeting where the Fed can begin easing policy. In our view, inflation will likely determine when the Fed will begin easing policy while economic activity will determine the pace and magnitude of rate cuts.
A still strong growth profile is currently allowing the Fed to be patient as it seeks to gather further confirmation that core price disinflation is not a temporary phenomenon. However, we think that at the first clear sign of growth deceleration, the Fed will react more swiftly toward loosening the policy restraint.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.