Bank estimates more spaced interest reductions due to improvement in the job market and economic growth
The assessed, in its analysis released this Thursday (Dec 5, 2024), that the (Federal Reserve) may adopt a more moderate approach to interest cuts, reflecting the strengthening of the United States economy.
The financial institution foresees cuts of 25 basis points at meetings in December, January and March, with possible additional reductions in June and September. This perspective comes at a time when recent statements by Fed officials point to a possible slowdown in this pace of cuts.
No evento “DealBook Summit” do Fed Chairman Jerome Powell cited the resilience of the American economy, citing improvements in the job market, decreased downside risks, growth above expectations and slightly higher inflation since September. “This suggests that we can adopt a slightly more cautious stance”, Powell stated about the monetary policy adjustment.
Christopher Waller, head of the Fed, expressed his inclination to support a cut at the December meeting at a conference. However, he admitted that the latest inflation data raises doubts, indicating that the Fomc (Federal Open Market Committee) could consider keeping rates unchanged if future data contradicts current forecasts.
Alberto Musalem, president of the St. Louis Fed, mentioned at the and that further flexibility is likely, but “the time to slow down cuts or pause them may be approaching”.
Mary Daly, president of the San Francisco Fed, in an interview with stated that the decision on the next cut will be widely debated at the next Fomc meeting, and that “whether it will take place in December or later”.
With information from Brazil
