Why Is the Federal Reserve Really Cutting Rates in 2024?

The Federal Reserve’s recent pivot, which includes forecasting three rate cuts in 2024 , has sent ripples across financial markets and left analysts scratching their heads. At first glance, the decision seems counterintuitive. Rate cuts are typically reserved for times of economic hardship, not prosperity. With the core inflation rate stubbornly hovering at 4% and unemployment projections impressively low, the rationale behind the Fed’s anticipatory easing requires a deeper dive. The Federal Reserve uses interest rate adjustments as a primary tool to manage economic growth and inflation. Conventional wisdom suggests that when the…