(Daily Caller)—The Federal Reserve announced it would not change its benchmark federal funds rate on Wednesday, keeping the rate at its highest level since 2001, but did signal plans to cut rates in 2024.
The Fed’s decision not to raise rates keeps the target range between 5.25% and 5.50%, marking the third meeting in a row where the Fed chose to not adjust the rate, according to an announcement from the Federal Reserve following a meeting by the Federal Open Market Committee (FOMC). The Fed also released its future projections of the economy and the federal funds rate, with FOMC members projecting rates will be lowered to a median of 4.6% by the end of 2024, indicating three interest rate cuts if the Fed sticks to its typical 0.25% change pattern.
“Recent indicators suggest that growth of economic activity has slowed from its strong pace in the third quarter,” the FOMC statement reads. “Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated…The Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”
The last rate hike was at the committee’s meeting in July and was the 11th in a series of hikes starting in March 2022 in an effort to combat inflation, which peaked at 9.1% in June 2022.
“The Fed is unlikely to raise their interest rate targets any further in 2024,” Dr. Thomas Hogan, senior fellow at the American Institute for Economic Research, told the Daily Caller New Foundation. “The question is when they will start cutting rates. The median FOMC projection is that inflation (PCE inflation, not CPI) will fall to 2.5% in 2024 and that the fed funds rate will be cut to 5.1% by the end of 2024. If inflation appears to be coming down, then we should expect their economic projections to show lower projections for inflation and the fed funds rate, indicating they will begin cutting rates sooner than previously expected.”
Inflation decelerated slightly in November, with the consumer price index (CPI) rising 3.1% year-over-year compared to 3.2% in October, far above the Fed’s 2% target. Core CPI, which excludes energy and food, remained even more elevated at 4.0%, following significant recent deflation in the price of gasoline.
The economy showed strong growth in the third quarter of 2023, with gross domestic product rising 5.2% compared to just 2.1% in the second quarter. The U.S. job market continues to slow, with the economy adding 199,000 jobs in November, with around 47,000 of those jobs coming from the return of striking workers in the auto and motion picture and sound industries.
Top investment banks and asset managers are mixed in their forecasts for the U.S. economy in 2024, with strong growth but high inflation and slowing job numbers clouding recession predictions and complicating the Fed’s long-term goal to reduce inflation without triggering a recession.
“But even if the Fed does start cutting rates in 2024, it is unlikely to lower them by much,” Hogan told the DCNF. “The FOMC’s most recent projections show the FOMC keeping interest rates above 5% in 2024 and not getting below 4% until 2026.”
Sound off about this article on the Economic Collapse Substack.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
Survival Beef on sale now. Freeze dried Ribeye, NY Strip, and Premium beef cubes. Promo code “jdr” at checkout for 25% off! Prepper All-Naturals
Image by Amanda via Flickr, CC BY 2.0 DEED.
It’s becoming increasingly clear that fiat currencies across the globe, including the U.S. Dollar, are under attack. Paper money is losing its value, translating into insane inflation and less value in our life’s savings.
Genesis Gold Group believes physical precious metals are an amazing option for those seeking to move their wealth or retirement to higher ground. Whether Central Bank Digital Currencies replace current fiat currencies or not, precious metals are poised to retain or even increase in value. This is why central banks and mega-asset managers like BlackRock are moving much of their holdings to precious metals.
As a Christian company, Genesis Gold Group has maintained a perfect 5 out of 5 rating with the Better Business Bureau. Their faith-driven values allow them to help Americans protect their life’s savings without the gimmicks used by most precious metals companies. Reach out to them today to see how they can streamline the rollover or transfer of your current and previous retirement accounts.
