A majority of economists surveyed by Reuters expect the U.S. Federal Reserve to maintain its benchmark interest rate at current levels through 2024, signaling a pause in monetary tightening despite ongoing inflation pressures.
The latest poll, conducted between March 4-11 with responses from 105 economists, indicates 78% of participants foresee the Fed’s federal funds rate remaining unchanged at 5.25%-5.50% for the remainder of the year. Only 22% anticipate at least one 25-basis-point cut by December, reflecting a cautious stance toward policy easing.
The median forecast suggests the Fed will hold rates steady through the third quarter, with a gradual shift toward potential reductions in the final months of 2024. Economists cited persistent inflation, resilient labor market conditions, and geopolitical risks as key factors influencing the central bank’s decision-making.
Market pricing, as reflected in Fed funds futures, aligns with the poll’s findings, showing a 65% probability of no rate changes in 2024. Traders have scaled back expectations for aggressive easing, with only two quarter-point cuts now priced in for the year.
The Fed’s next policy meeting is scheduled for April 30-May 1, where updated economic projections and commentary will provide further clarity on the trajectory of interest rates. Analysts note that any deviation from the current stance would likely depend on a sustained decline in inflation toward the central bank’s 2% target.
