03/11/2024

New, Strong Data Will Affect Fed Projections on Timing of Rate Cut

Continuing strong economic performance may impact rate changes

No one expects the Federal Reserve to change interest rates at next week's policy meeting, but whether officials hold to their previous rate-cutting outlook is a more open question as the economy keeps outperforming expectations.

Data since the Fed last met has confirmed policymakers' broadly shared baseline that their overnight interest rate will fall this year, with Fed Chair Jerome Powell telling U.S. lawmakers last week the central bank was "not far" from gaining enough confidence in declining inflation to reduce rates.

But policymakers' new projections will show whether they now anticipate fewer than the three quarter-percentage-point reductions this year estimated in December, or if they still think the economy can continue expanding while inflation continues to fall, allowing rates to fall as well.

Please select this link to read the complete article from Inc.