Economists and investors alike are having a hard time digesting the Fed's comments after the most recent Federal Open Market Committee (FOMC) meeting. The general consensus was that the Fed's stance was relatively dovish, and they expect the Fed will begin lowering interest rates later this year. However, there was disagreement on how many times the Fed would cut rates with the overall range of estimates falling between one and four times.
Tag: interest rates
IMF Raises Growth Forecast for ‘Overheated’ U.S. Economy and Urges Caution on Rate Cuts (Macro News for April 13, 2024 – April 19, 2024)
The International Monetary Fund (IMF) increased its forecast of U.S. economic growth for 2024 to 2.7%. This new forecast is 0.6% higher than the previous forecast. The U.S. growth rate is far above its developed economy peers which include Germany, Japan, and Canada. The 20 nations that use the euro are expected to grow by a lackluster 0.8% for the year 2024.
European Central Bank’s Lagarde Signals June Rate Cut But Says Future Rate Path Uncertain (Macro News for March 23, 2024 – March 29, 2024)
Christine Lagarde, head of the European Central Bank (ECB), stated that ECB policymakers are considering lowering interest rates in the June 2024 meeting. Lagarde also stated that forecasting bank actions beyond that date was impossible until they received additional data on inflation and union wage negotiations.
Fed Chair Powell Says There’s No Rush to Cut Interest Rates (Macro News for March 9, 2024 – March 15, 2024)
Federal Reserve Chair Jerome Powell testified before Congress that the Fed was not rushing to reduce interest rates but that interest rates were likely at their peak for the current tightening cycle. He also stated that it appeared likely that rate cuts would occur later in the year. Powell predicted that the U.S. economy would experience a 1.4% growth rate this year and there was little danger of a recession. Consumer spending remains solid but is expected to be lower in the first quarter of 2024 compared to the 4.9% growth posted in the fourth quarter of 2023.
Pearson Economic News 