INVESTORS were betting big on Federal Reserve rate cuts at the start of 2024, wagering that central bankers would lower interest rates to around 4 per cent by the end of the year. But after months of stubborn inflation and strong economic growth, the outlook is starting to look much less dramatic.
Market pricing now suggests that rates will end the year in the neighbourhood of 4.75 per cent. That would mean Fed officials had cut rates two or three times from their current 5.3 per cent.
Policymakers are trying to strike a delicate balance as they contemplate how to respond to the economic moment. Central bankers do not want to risk tanking the job market and causing a recession by keeping interest...
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