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With the economy experiencing robust growth, it’s a tough case to make that higher interest rates are having a substantially negative impact, CNBC reports.
Is it possible that policymakers will simply decide to keep rates where they are for the rest of 2024 without making a single cut?
There’s not much precedent for the Fed to cut rates in a robust period of growth such as the present (except for the early 1980s, when it was forced to stamp out runaway inflation). The “higher-for-longer” stance was not what investors were expecting at the beginning of 2024, but it’s what they have to deal with now that inflation has proven stickier than anticipated.
With that said, current expectations for Fed policy seem to be leaning toward cutting rates slightly but not returning to the near-zero rates that prevailed in the years following the 2007-2008 financial crisis.
