Will the Federal Reserve cut rates this year?
The sustained increase in inflation cannot be dismissed as a temporary fluctuation
THE positive outlook for interest rate cuts this year has vanished. At the start of 2024, the expectation was for six rate cuts, but now, this has shrunk to just one cut this year. Since the end of 2023, the iFast Research Team has maintained a contrarian stance of no rate cuts in 2024.
Fed delays cuts
US consumer prices accelerated more than anticipated in March. The consumer price index rose by 3.5 per cent year on year in March, up from an increase of 3.2 per cent in February. This marks the highest annual surge in the past six months.
This robust pace was primarily driven by increases in housing and petrol costs. Meanwhile, core inflation, which excludes volatile food and energy prices, stood at 3.8 per cent in March, significantly exceeding the Federal Reserve’s long-term target of 2 per cent.
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