FED expected to cut rate twice this year

 

AI Overview

 

Financial markets and economists anticipate the Federal Reserve will cut interest rates twice this year, with the first cut likely occurring in September. This shift in monetary policy is expected to lower borrowing costs for consumers and businesses, potentially stimulating economic growth. 

 

Details:

• September Start:

  The consensus view is that the Federal Reserve will begin reducing interest rates in September. 

   
• Second Cut:

  A second rate cut is anticipated by the end of the year, likely in December. 

   
• Economic Slowdown:

  The Federal Reserve is considering these cuts due to a recent slowdown in U.S. economic growth. 

   
• Inflation Monitoring:

  The Fed is carefully monitoring inflation and is prepared to adjust its approach if inflation picks up again. 

   
• Impact on Borrowing:

  Lower interest rates could make it cheaper for individuals and businesses to borrow money, potentially boosting spending and investment. 

   
• Job Market:

  While the unemployment rate remains low, the Fed is also considering the impact of any policy changes on the job market. 

   
• Market Expectations:

  Bond futures traders are pricing in a roughly 60% chance of a September cut and an 88% chance of at least two cuts by year-end, according to the CME FedWatch Tool.