Fed Unlikely to Cut Rates in 2024 Due to Sticky Inflation and Stronger Growth
-
Fed chief economist Sløk now believes the Fed will not cut rates in 2024 due to resilient inflation, stronger growth forecasts, and easing financial conditions.
-
Underlying inflation measures like wages and alternative inflation gauges are sticky between 4-5%, suggesting persistent inflation.
-
Growth forecasts continue getting revised higher after the Fed's December pivot, making rate cuts less likely.
-
Financial conditions have eased significantly, boosting equities, M&A, IPOs, and credit markets.
-
Sløk concludes the Fed will spend most of 2024 fighting inflation rather than cutting rates to support growth.