RBC has revised their forecast for the Federal Open Market Committee (FOMC) this year, now expecting a 25 basis point rate cut in December instead of June. Other banks, such as Deutsche Bank and Bank of America, have also revised their forecasts to expect a December rate cut instead of June. Minneapolis Federal Reserve President Neel Kashkari stated in an interview that it is a 'reasonable prediction' that the U.S. central bank will cut interest rates once this year, likely in December. Kashkari emphasized that the decision will depend on data, and the Fed is in a good position to take its time and gather more information on inflation, the economy, and the labor market before making any decisions. The U.S. economy is showing signs of reacceleration in inflation, with the Fed's 'supercore' inflation measure doubling to 8.2% in March compared to last December. RBC has also cut their rate cut expectations for 2024 from three to one. Bank of Minneapolis President Neel Kashkari says the Federal Reserve is well poised to keep an eye on economic data and be patient about cutting interest rates. Kashkari stated that more evidence is needed to convince the Fed that inflation is well on its way back down to 2%. The Fed's monetary policymakers have reduced their estimated rate cuts for this year from three to one, and they are looking for more signs of inflation slowing before lowering borrowing costs. Kashkari believes any rate cut would likely come toward the end of the year. Recent data showed that underlying consumer price growth slowed for a second straight month, with the core consumer price index rising 0.2% from April and 3.4% annually, the slowest pace in over three years. Minneapolis Federal Reserve President Neel Kashkari stated that it is reasonable for a rate cut to come in December. He reiterated that the median projections are for one rate cut, likely towards the end of the year. Kashkari believes that more evidence is needed to convince that US inflation is heading to stronger levels than in other countries that are cutting rates. He also mentioned that the labor market may experience more cooling, but he hopes it will be modest. Kashkari expressed that the impact of immigration in the long-run on inflation is hard to judge. He believes that the best thing the Fed can do for housing is to get inflation down. Kashkari has been more hawkish than his colleagues and is not jumping onto the September rate cut bandwagon. [37d4a1be] [f5ce993e] [0f0bdbb4] [27bff141] [a97a68af]
Federal Reserve Bank of Philadelphia President Patrick Harker stated that one rate cut by the end of 2024 would be 'appropriate' as the Federal Reserve works to bring down inflation rates to its 2% target. This aligns with the Fed's updated dot-plot, which indicates a 25 basis point cut in the fed funds rate once in 2024. Harker anticipates a slowdown in inflation, employment, and economic activity, but the timing of these moves remains uncertain. He mentioned that the Fed's decision on rate cuts is data-dependent and could result in either two cuts or none for this year. Harker made these remarks at the Global Interdependence Center 42nd Annual Monetary and Trade Conference in Philadelphia. He is not a voter on the Federal Open Market Committee this year. [f98f2ea3]
Philadelphia Fed President Patrick Harker expects one rate cut this year. Harker's statement comes amidst discussions about the possibility of the Federal Reserve reducing interest rates. The rate cut is expected to happen sometime this year. Harker's comments align with the views of other Fed officials who have expressed concerns about the economic impact of the COVID-19 pandemic. The article also mentions other news topics such as the Israel-Hamas war, Pakistan's record rice exports, Russia surpassing the US as a gas supplier to Europe, and Benjamin Netanyahu dissolving Israel's war cabinet. [c68c9611]
Michelle Bowman, a high-ranking member of the Federal Reserve’s policy-setting committee, stated that she does not expect interest rates to come down in 2024. Bowman, one of the Fed’s seven governors, made this statement during a question-and-answer session at a London think tank. She mentioned that she would need to see a deterioration in inflation and the labor market as evidence of needing to move more quickly to lower the federal funds rate. Bowman remains committed to the Fed’s long-held 2% inflation target. Her caution casts doubt on whether the first U.S. rate cut since 2020 will come at one of the Fed’s two remaining meetings ahead of the election. The market prices in a roughly 66% probability of lower rates before November. [f63e9243]