Fed Rate Outlook for 2024 Shifts as Inflation Defies Expectations

Investors had expected the Fed to cut rates sharply in 2024, but stubborn inflation and strong growth may change that outlook
Market pricing now suggests rates ending 2024 around 4.75% instead of 4% as previously expected
The Fed wants to avoid keeping rates too high and causing a recession, but also wants to avoid cutting too early and reaccelerating inflation
Policymakers are focused on what happens with inflation as they debate when to cut rates
If policymakers believe inflation will hit 2% target, they may feel comfortable cutting rates even in a strong economy