We are proud to be the home of the @KansasCityFed , a leader in US economic policy serving the Great Plains and the West. The annual forum in Jackson Hole sets worldwide fiscal policy discussion. Appreciate having their talent based here in the heartland. https://t.co/fI1NXx07NF
— Mayor Q (@QuintonLucasKC) August 25, 2024
According to solid signals from financial markets and Fed officials, the Federal Reserve is poised to cut interest rates at its upcoming meeting on September 18. In a recent speech, Fed Chair Jerome Powell stated, “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Our CEO @ZachKBradford recently joined @timsteno and @carolmassar on @Bloomberg @BW @podcasts to chat about the #Bitcoin industry, $CLSK fleet efficiency, and more.
Listen 🔊: https://t.co/lEdRlPrelK
— CleanSpark Inc. (@CleanSpark_Inc) August 27, 2024
Powell’s comments suggest that the Fed is ready to begin lowering rates after a year of holding them steady at a 23-year high.
Read: Fed’s Jerome Powell Declares ‘Time Has Come’ for Interest-Rate Cuts (via @WSJ) https://t.co/n5M7g6HPag
— Illinois Manufacturers' Association (IMA) (@IMA_Today) August 26, 2024
The central bank has been engaged in an aggressive rate-hiking campaign since early 2022 to combat the highest inflation in decades. However, with inflation cooling and the job market slowing, the Fed appears to be shifting its stance. The Fed’s July meeting minutes also indicated potential support for a rate cut.
Several policymakers observed that recent progress on inflation and increases in the unemployment rate had provided a plausible case for reducing rates by 25 basis points at that meeting or that they could have supported such a decision. Updated projections from the Fed, set to be released on September 18, will provide further insight into the central bank’s plans.
Powell hints at upcoming rate cut
In June, most policymakers were expecting one or two interest rate cuts in 2024, though a minority believed rates would be held steady. Forecasts indicate that the Federal Funds rate could end in 2024 at 4.25% to 4.5%, a percentage point lower than current rates. The Fed’s upcoming decision to cut interest rates indicates that officials feel confident that price pressures are coming under control.
Powell attributed the progress in taming inflation to the “unwinding” of pandemic-related distortions to supply and demand, improvements on the supply side, and a cooling job market. However, uncertainty remains about the pace of rate cuts through the remainder of the year and their potential impact on the economy. A significant question mark is the future of America’s job market, a key driver of the U.S. economy.
If Americans find it hard to get new jobs or face layoffs, they may cut back on spending, which could spell trouble ahead, given that consumer spending makes up about 70% of the U.S. economy. Financial markets and policymakers expect the Fed to cut interest rates on September 18, but the future remains uncertain. The Fed has maintained flexibility in its approach, and the pace of rate cuts will depend on incoming economic data and the evolving outlook for inflation and employment.
