Mortgage Rates

Federal Reserve Meeting Signals Rate Cuts Expected in 2024

Austin Luxury Group|December 15, 2023
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Policymakers kept interest rates on hold for a third consecutive meeting, at their highest level in 22 years. Markets rallied with the news.

Federal Reserve officials left interest rates unchanged in their final policy decision of 2023 and forecast that they will cut borrowing costs three times in the coming year, a sign that the central bank is shifting toward the next phase in its fight against rapid inflation.

Interest Rates

Interest rates are now set to a range of 5.25 to 5.5 percent, where they have been since July. After making a rapid series of increases that started in March 2022 and pushed borrowing costs to their highest level in 22 years as of this summer, officials have now held policy steady for three straight meetings.


Policymakers are striking that patient stance to give themselves time to assess whether interest rates are high enough to weigh on the economy and ensure that inflation will slow to the Fed’s 2 percent target over time. Price increases have been cooling for months and hiring has slowed, which has been giving officials more confidence that their current setting may be sufficient.

Markets & Investors

Investors are watching closely for any hint at when — and how much — interest rates will fall. Fed policymakers projected on Wednesday that they will lower borrowing costs to 4.6 percent by the end of 2024, down notably from their previous 5.1 percent estimate. The forecast implies that officials will make three rate cuts next year. That call for lower rates was widespread: Not a single Fed official expected interest rates to be higher at the end of next year.



Original Aritcle by: Karl Russell, NY Times