Fed Forecasts Slower Pace of Rate Cuts Than Markets Expect Even as Inflation Cools
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The Federal Reserve projected 3 rate cuts totaling 75 basis points in 2024, but markets are betting on 6 cuts totaling 150 basis points.
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The Fed says an additional rate hike is still possible but unlikely at this point.
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Inflation continues to ease, though it remains elevated, and the labor market remains strong.
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Markets rallied strongly on the Fed projections, with the S&P 500 gaining 1.4% and the 10-year Treasury yield dropping 17 basis points.
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Fed Chair Jerome Powell sounded upbeat about disinflation progress but cautioned that stronger growth could lead to higher rates.