Markets See Measured Fed Rate Cuts In 2024

The Fed funds rate is expected to decline by the end 2024, but not by much and largely later in the year. That’s the current expectation of both policymakers and markets. Even though, the Federal Reserve could, possibly, still raise rates one more time in 2023. The markets remain somewhat ahead of the Fed in the magnitude of potential 2024 rate cuts.

However, any decline in interest rates is expected to be mild when compared to the pace of rate increases over past years. Markets broadly anticipate a 1% decline in the Fed funds rate to between 4% to 5% by the end of 2024. However, any rate decline is loaded towards the second half of 2024, with cuts most likely starting in June or later.