Economists Increasingly Predict December Federal Reserve Rate Cut Amid Policy Debate
WASHINGTON, November 15 – A growing consensus among economists anticipates the Federal Reserve will begin cutting interest rates in december, despite a clear division among policymakers regarding the timing and pace of easing monetary policy, a reuters poll revealed Thursday.The survey indicates a strengthening belief that inflation is cooling sufficiently to warrant a shift in the Fed’s stance.
the expectation of a December cut reflects mounting evidence of slowing economic growth and receding inflationary pressures, prompting economists to revise their forecasts. This potential pivot by the central bank carries notable implications for markets,businesses,and consumers,influencing borrowing costs for everything from mortgages and auto loans to corporate investments. A rate cut could stimulate economic activity, but also risks reigniting inflation if implemented prematurely.
According to the poll, a majority of economists-58 of 88 surveyed-now predict the Fed will lower rates by at least 25 basis points at its December 12-13 meeting. This marks a considerable increase from a poll conducted just last month, where only 33% anticipated a cut by year-end. The median forecast now calls for three 25-basis-point cuts in 2024, bringing the federal funds rate down to a range of 4.50%-4.75%.
Though, the survey also underscores the internal debate within the Federal Reserve itself. Recent public statements from Fed officials have been mixed, with some emphasizing the need to remain vigilant against inflation while others acknowledge the potential for economic slowdown. This divergence is reflected in the poll results, which show a wide range of forecasts among economists.
“The market is pricing in a lot of cuts, and the Fed is pushing back, but the data is increasingly supportive of a more dovish stance,” said one economist who participated in the survey. “The question is not if they will cut, but when and how quickly.”
the Reuters poll was conducted november 8-15, gathering responses from economists across the United States. The survey included questions about the federal funds rate, inflation expectations, and economic growth forecasts. Sarupya ganguly of Reuters reported on the findings.
