The Federal Reserve held interest rates in June, announcing the decision after its FOMC meeting last week. While rates remain higher for longer, are there any signals as to when the Fed will start cutting rates?
There’s still hope among experts that the Fed is still considering two rate cuts. Minneapolis Fed CEO and President Neel Kashkari believes it is "reasonable" that the Fed could wait until December — after the 2024 election — to begin cutting.
Former Chicago Fed President and CEO Charles Evans joins Market Domination to talk about the Fed’s monetary policy outlook and what it will take for officials to start cutting rates while keeping on the path to their inflation target.
"The FOMC has been talking uniformly about how they need more confidence… They are not very detailed, they are not detailed at all in what it takes in order for them to become more confident," Evans explains, adding:
"And so, it’s this, currently, somewhat opaque process as to how many good inflation reports are they going to need to see before they say, ‘okay, I think we’re finally going to get down to 2.’ They have the benefit of a strong economy right now — the unemployment rate is 4%, historically that’s quite low, and the funds rate’s at 5.3%. And they must be asking themselves, ‘why should I cut rates early until I absolutely know that I’m going to get down to 2?’
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