In his July commentary, William Greiner, chief economist, shares why he expects the Fed to lower rates later this year as the economy cools slightly and inflation continues to ease.
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Despite a notable uptick in inflation at the year's start, the Fed's decision to keep the benchmark rate unchanged highlights a nuanced anticipation of economic trends. The resilience of inflation, especially in the service sector, raises intriguing questions about monetary policy's role in shaping economic outcomes. Moreover, the broader implications for the economy, including the impact on consumer spending, housing markets, and overall economic growth, remain areas of keen interest. The anticipation of rate cuts, despite the persistence of higher-than-target inflation, introduces a layer of uncertainty plus a potential strategic advantage for those who navigate this environment effectively. #FedDecision #InflationTrends #MonetaryPolicy
Federal Reserve still foresees 3 interest rate cuts this year despite bump in inflation
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The latest economic insights from Northmarq
“While interest rates may have peaked, the Fed appears willing to keep rates elevated until they see a more substantial slowdown in the economy and sustained easing of inflationary pressures,” notes John Beuerlein, Chief Economist at the Pohlad Companies, in our January Economic Commentary Viewpoint report. #Northmarq #CRE Read more: https://lnkd.in/e6KjpZtu
Economic Commentary: Year Begins with a Disconnect Between Market Expectations and Fed Predictions for Interest Rate Movement in 2024
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Inflation data for the first quarter has shown a lack of acceleration, prompting considerations about whether the trend could be prolonged. The Federal Reserve has been closely monitoring inflation amid concerns about its impact on the economy. While some inflation is expected and can be a sign of economic growth, stalling inflation raises questions about the effectiveness of current policies and the potential for economic stagnation. The Federal Reserve needs to consider adjustments to its policies based on the evolving inflation landscape. Balancing economic growth, employment goals, and price stability becomes challenging in the face of unexpected inflation patterns. #Inflation #FederalReserve #USEconomy
How Stalling Inflation Data May Concern The Fed And Affect Rate Cuts
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Market expectations vs. Fed predictions: read our latest Viewpoint for insight into current economic conditions and where interest rates may be heading!
“While interest rates may have peaked, the Fed appears willing to keep rates elevated until they see a more substantial slowdown in the economy and sustained easing of inflationary pressures,” notes John Beuerlein, Chief Economist at the Pohlad Companies, in our January Economic Commentary Viewpoint report. #Northmarq #CRE Read more: https://lnkd.in/e6KjpZtu
Economic Commentary: Year Begins with a Disconnect Between Market Expectations and Fed Predictions for Interest Rate Movement in 2024
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Seems like the market is expecting rate cuts to happen sooner than the Fed is signaling. From Northmarq's Viewpoint: "Markets are pricing in five cuts in interest rates beginning in March or May, however there was nothing in the minutes of the Fed’s meeting to suggest that the Fed is close to starting to cut rates, or that it plans to cut rates as much as markets are currently expecting." Who will be right? The Fed's actions can be puzzling at times and make me question their direction; but I've also heard the mantra many times, "Don't Fight the Fed". Only time will tell. #northmarq #multifamily #crefinance #crefinancing
“While interest rates may have peaked, the Fed appears willing to keep rates elevated until they see a more substantial slowdown in the economy and sustained easing of inflationary pressures,” notes John Beuerlein, Chief Economist at the Pohlad Companies, in our January Economic Commentary Viewpoint report. #Northmarq #CRE Read more: https://lnkd.in/e6KjpZtu
Economic Commentary: Year Begins with a Disconnect Between Market Expectations and Fed Predictions for Interest Rate Movement in 2024
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Why Cut Rates in an Economy This Strong? A Big Question Confronts the Fed. The central bank is widely expected to lower interest rates this year. But with growth and consumer spending chugging along, explaining it may take some work. The Federal Reserve is widely expected to leave interest rates unchanged at the conclusion of its meeting on Wednesday, but investors will be watching closely for any hint at when and how much it might lower those rates this year. The expected rate cuts raise a big question: Why would central bankers lower borrowing costs when the economy is experiencing surprisingly strong growth? The United States’ economy grew 3.1 percent last year, up from less than 1 percent in 2022 and faster than the average for the five years leading up to the pandemic. Consumer spending in December came in faster than expected. And while hiring has slowed, America still boasts an unemployment rate of just 3.7 percent — a historically low level. The data suggest that even though the Fed has raised interest rates to a range of 5.25 to 5.5 percent, the highest level in more than two decades, the increase has not been enough to slam the brakes on the economy. In fact, growth remains faster than the pace that many forecasters think is sustainable in the longer run. Fed officials themselves projected in December that they would make three rate cuts this year as inflation steadily cooled. Yet lowering interest rates against such a robust backdrop could take some explaining. Typically, the Fed tries to keep the economy running at an even keel: lowering rates to stoke borrowing and spending and speed things up when growth is weak, and raising them to cool growth down to make sure that demand does not overheat and push inflation higher. The economic resilience has caused Wall Street investors to suspect that central bankers may wait longer to cut rates — they were previously betting heavily on a move down in March, but now see the odds as only 50-50. But, some economists said, there could be good reasons for the Fed to lower borrowing costs even if the economy continues chugging along. Here are a few tools for understanding how the Fed is thinking about its next steps. https://lnkd.in/gJ7phJvY
Why Cut Rates in an Economy This Strong? A Big Question Confronts the Fed.
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Economic experts are closely monitoring the Federal Reserve’s approach to interest rates amid rising concerns about inflation and economic growth. The Fed has been gradually increasing interest rates since March 2022. This strategy aims to combat inflation, which peaked at 7.1% in June. Despite these efforts, inflation remains above the Fed’s target rate of 2%. […]
Will the Fed Change Interest Rates to Fight Inflation? | US Newsper
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Inflation is all the talk right now, and I've had many conversations lately about its widespread impact on consumers, businesses, and investors alike. As prices for goods and services continue to rise, many are experiencing a reduction in their purchasing power, prompting a need for careful budgeting and financial planning. Staying informed about inflation trends has become increasingly critical as these dynamics shape our financial landscape. Fed Chair Jerome Powell recently addressed the nation, acknowledging signs of cooling inflation while emphasizing that the Federal Reserve is maintaining its current stance on interest rates. This cautious approach reflects the challenges of managing inflation in a recovering economy, where maintaining both growth and stability is crucial. For individuals grappling with the effects of inflation, there are proactive steps that can be taken to navigate these economic uncertainties. Meticulous budgeting and prioritizing essential expenses can help mitigate financial strain in the short term. Additionally, considering investments known to perform well during inflationary periods—such as real estate, commodities, or select stocks—may offer resilience against rising costs. How are you adjusting your financial strategies in response to these inflationary pressures and the evolving economic conditions? Click here to read more about what the Federal Reserve Chair is saying about inflation: https://lnkd.in/eQzvkFzJ
Fed Chair Jerome Powell: US inflation is cooling again, though it isn't yet time to cut rates
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The Impact of Yesterday’s Fed Rate Cuts on the Economy 📉💵 Yesterday, The Fed delivered a 50 basis point rate cut on Wednesday - lowering borrowing costs for the first time in more than four years - and assured investors the jumbo-sized reduction was a measure to safeguard a resilient economy, rather than an emergency response to recent weakness in the labor market. This decision, influenced by concerns over inflation and economic growth, marks a significant shift in monetary policy. Here’s a closer look at the implications: Key Data Points 📊 Current Federal Funds Rate: The new target range is now between 4.25% and 4.50%. This is the first rate cut since 2020, signaling a response to a cooling economy. Inflation Trends: Inflation has seen a slight decline, with the Consumer Price Index (CPI) rising 3.2% year-over-year, down from a peak of 9.1% last summer. The Fed aims for a target inflation rate of 2%. Economic Growth: GDP growth has slowed to 1.9% in the last quarter, reflecting global uncertainties and domestic spending hesitancies. The Fed’s cut aims to stimulate growth by lowering borrowing costs. Implications for Businesses and Consumers 🚀🏠 For Businesses: Lower interest rates can reduce borrowing costs, encouraging investments in expansion and innovation. This is crucial for SMEs looking to rebound post-pandemic. For Consumers: Mortgage rates and personal loans are likely to decrease, making home ownership and financing more accessible. This could boost consumer spending, which is vital for economic recovery. What’s Next? 🔍 While the Fed's cut aims to promote economic stability, the central bank has indicated that future adjustments will depend on inflation trends and economic indicators. Stakeholders should remain vigilant, as market reactions and economic forecasts evolve. In summary, the Fed’s decision is a strategic move to navigate a challenging economic landscape. As we monitor its impact, businesses and consumers alike must adapt to the changing financial environment. 💡 #FederalReserve #InterestRates #Economy #BusinessGrowth #Finance #Inflation #Growth
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Economic experts are closely monitoring the Federal Reserve’s approach to interest rates amid rising concerns about inflation and economic growth. The Fed has been gradually increasing interest rates since March 2022. This strategy aims to combat inflation, which peaked at 7.1% in June. Despite these efforts, inflation remains above the Fed’s target rate of 2%. […]
Will the Fed Change Interest Rates to Fight Inflation? | US Newsper
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