Fed rate cuts in 2024

by Tiffany Wang, WOO Analyst

The PCE index is currently registering below the Federal Reserve's targets on a 6-month annualized basis. Also, the US private sector is generating an average of approximately 115,000 new jobs per month, reflecting a comparatively modest pace of growth. Notably, the Federal Funds Rate stands at 5.25% amidst these economic conditions.

Given these indicators, there is a clear expectation in the market that the Fed will implement rate cuts in 2024. This sentiment is underscored by the bond markets, which are currently pricing in approximately 175 basis points of cuts by early 2025.

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