From CNBC.: 2024-04-17 16:05:04

Federal Reserve Chair Jerome Powell signaled a pause on interest rate cuts, citing a lack of progress in reaching the Fed’s target inflation rate of 2%. Market expectations for rate cuts are highly volatile, with a 71% probability of waiting until September. Some economists warn of a ‘real risk’ of no cuts until 2025.

The uncertainty surrounding the Fed’s rate cuts poses a danger with the potential for a policy mistake. Despite a strong economy, higher rates could threaten labor market stability and finance sectors. Economists believe the Fed should have already begun cutting rates to reach its inflation goal. The central bank’s dependence on data leaves it vulnerable to shifts in policy direction.

Read more: Wall Street pushes out rate-cut expectations, sees risk of no action until 2025