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The US central bank expects to end 2024 with interest rates down another half-point from the current 4.75-5%, according to the bank’s chair.
Speaking at the National Association for Business Economics annual meeting in Nashville on Monday, Jerome Powell hinted there will be two future rate cuts in the coming months, caveating “if the economy performs as expected.” The US Federal Reserve’s committee overseeing interest rate cuts meets next on Nov. 6-7, and again on Dec. 17-18.
“It is not a committee in a hurry to cut rates quickly,” Powell said. Factoring into any decision will be two upcoming employment reports and a jobs report. Powell also noted he was looking at revisions to the National Income and Product Account, which indicated the economy is larger and household income is higher than previously reported.
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Powell’s outlook comes less than two weeks after the central bank announced a half-point cut to the cost of borrowing, its first since the COVID-19 pandemic hit in March 2020. Inflation is gradually approaching the Fed’s 2% goal, with August’s year-over-year rate measuring at 2.2%.
The labor market has also cooled in the past year, so much so that some economists have questioned whether the central bank waited too long to begin cutting rates. “We don’t think we’re behind,” Powell previously said.