On Friday, investment banking advisory firm Evercore projected that the Federal Reserve would implement at least three interest rate cuts in 2024, potentially starting with a significant 50 basis points reduction in September. The forecast comes as Evercore analysts suggest a front-loaded approach by the Fed to ensure a smooth economic deceleration.
According to Evercore, the anticipated rate cuts are slated for September, November, and December of 2024. The firm's analysts believe that a more aggressive initial cut could support the Federal Reserve's goal of achieving a 'soft landing' for the economy, a scenario where inflation is curbed without causing a recession.
The possibility of a 50 basis point cut in September is based on current economic reports, which seem to have influenced Evercore's expectations.
In their comments, Evercore analysts stated, "Following this report we think the Fed will cut at least three times in 2024 – September, November and December – in a more front-loaded effort to secure the soft landing."
This outlook by Evercore comes amid varying opinions on the future actions of the Federal Reserve. Market participants and other financial institutions will likely monitor upcoming economic indicators and Fed communications closely for further insights into the central bank's policy trajectory.
In other recent news, the U.S. Federal Reserve is leaning towards an interest rate cut in September, as suggested by RBC, following the latest Consumer Price Index (CPI) report. This comes after a decrease in June's CPI growth and a relaxation in labor market conditions. Meanwhile, BCA Research predicts a decline in the S&P 500 to 3750, anticipating a recession towards the end of 2024 or the beginning of 2025.
U.S. households have reached a record net worth of $161 trillion in the first quarter of 2024, largely due to rising equity prices and real estate values, according to a Federal Reserve report. BNP Paribas (OTC:BNPQY) economists predict this increase could boost consumer spending by $246 billion this year.
BCA Research also forecasts that the Federal Reserve will eventually cut rates once the recession becomes evident.
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