Fed: Fed likely to cut rates in 2024 – John Williams

New York Federal Reserve (Fed) President John Williams signaled Wednesday that the Fed is likely to begin cutting interest rates in 2024, albeit in the second half of the year.

Main data

• Inflationary pressures have fallen amid a broad-based improvement.
• The path back to 2% inflation is likely uneven.
• The upcoming economic data will determine monetary policy.
• He remains fully committed to achieving the 2% inflation target.
• There is still a way to go before reaching 2%.
• Current unemployment of 2.7% is around the long-term level.
• The economy and labor market remain strong, imbalances are decreasing.
• The Fed's John Williams expects inflation to be between 2.0% and 2.25% in 2024, eventually reaching 2.0% in 2025.
• It forecasts growth of 1.5% this year and a maximum unemployment rate of around 4%.
• There are both upside and downside risks.
• A further decline in Fed reserves is expected, and attention will be paid to whether to review quantitative tightening.
• The debate over rate cuts is a sign of progress on inflation.
• It's too early to know if the Fed is drawing the right signals from housing inflation.
• The Fed is likely to cut rates by the end of the year.
• The aftermath of the pandemic continues to affect the economy, but optimism remains.