Will the Fed Cut Interest Rates in the US in 2024?

The Federal Reserve, known as the Fed, is the central bank of the United States. It plays a crucial role in shaping the country’s economic policies. Recently, there has been speculation about whether the Fed will cut interest rates in 2024. Despite the Fed’s belief in reducing rates three times this year, some experts, including Vanguard, the leading asset management fund in the US, disagree.

Vanguard’s Perspective

Vanguard manages approximately $7.7 trillion worth of assets globally (as of April 2023). According to Shaan Raithatha, a senior economist at Vanguard, the Fed is unlikely to cut interest rates in 2024. This perspective may have significant implications for central banks worldwide.

In a CNBC interview on March 21st, Raithatha mentioned that interest rate reduction forecasts have decreased from seven times earlier this year to three at present. If the Fed delays rate cuts due to a strong economy and low inflation, the stock market may continue to rise.

However, Raithatha believes that the current US stock market is relatively overvalued. Vanguard’s sentiment is shared by Mark Okada, co-founder and CEO of Sycamore Tree Capital Partners, who recently expressed his belief that the Fed will not cut interest rates in 2024.

International Central Banks’ Approach

Currently, central banks worldwide are assessing their own interest rate policies. While some countries, like the Swiss National Bank, have already implemented rate cuts, others are hesitant to “get ahead” of the Fed.

For more information, visit Business Today.

Source: CNBC