It’s a crucial week for the U.S. economy, with the Federal Reserve expected to cut interest rates for the first time since 2020. The move would be a major milestone both for the central bank’s long battle with inflation and for Americans, who have struggled with higher living costs for two years.
However, it is also an expectation that will only be fulfilled much later than the Fed and Wall Street had expected at the beginning of the year.
Fed officials and investors have long expected borrowing costs to fall sometime in 2024, according to their economic forecasts. Late last year, there were high hopes that the Fed would begin cutting interest rates in early 2024 to ease pressure not only on consumers but also on businesses of all sizes suffering from higher costs. According to the futures market, a rate cut in the spring around the turn of the year seemed possible, and most major Wall Street banks expected the first rate cut to come sometime before the summer.
But after nine months, there have been no rate cuts, dampening sentiment on Wall Street and leaving US consumers reeling from high interest rates. That could change this afternoon.
