News & Insights

"When will the Fed cut rates?" has become the great macroeconomic guessing game of 2024. Regrettably, the May jobs report did little to clarify when the central bank's rate-setting committee will pivot toward easing.

The Federal Open Market Committee (FOMC) came into the year penciling in three quarter-point cuts to the short-term federal funds rate. Overly optimistic market participants anticipated at least six rate reductions this year. Alas, sticky inflation data and a robust labor market have forced the Fed to delay taking down rates from a 23-year high.

To get a sense of what the experts are saying about the FOMC's possible paths, we turned to economists, strategists, portfolio managers and other knowledgeable observers. Please see a selection of their commentary, sometimes edited for brevity or clarity, below.

"The Establishment Survey reported 272,000 jobs created in May, surprising to the upside and making it more difficult for the Fed to cut interest rates soon. This pushes market odds of three cuts down to one, or possibly two, with yields up across the Treasury curve." – Mace McCain, chief investment officer at Frost Investment Advisors

Excerpted from Kiplinger on June 11, 2024. To read full article, click here