When will Americans see those interest-rate cuts?

Link:https://www.economist.com/finance-and-economics/2024/04/10/when-will-americans-see-those-interest-rate-cuts

In the wake of robust growth, this article says inflation is only looking stickier. For multiple months now, inflation has come in higher than forecasted and at this rate inflation at the end of the year will be hitting 4% rather than the Fed’s target 2%. Because of this the Fed is still not going to cut rates. The Fed not cutting rates will remain consistent with Powell’s approaches to the past and remain data-dependent before any decisions are made in terms of monetary policy. It will be interesting to see how the PCE, when it comes out, is interpreted. 

In terms of discussion that we’ve had in class about how politics can affect decisions made, I thought it was interesting that the article talked about how this might look for Biden with the election coming up. 

To perfectly sum up what this may mean for our near and distant future the article concluded with this quote: “The general conclusion today is that although growth has remained impressively strong, it now appears to be bumping up against the economy’s supply limits, and is therefore translating into persistent inflationary pressure. That calls for tight, not loose, monetary policy. The Fed, already cautious about cutting rates when inflation figures were more co-operative, is likely to be even more wary now.”