Central Banks
Fed Rate Cuts Are Likely to Be Slow — But Not Necessarily Steady
- In 1995 soft landing, the Fed cut then held for three meetings
- Policymakers pledge ‘patient’ and ‘slow’ pace of rate cuts
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There’s a saying about how the Federal Reserve manages interest rates: They go up the escalator and down the elevator. This time, it will likely be the reverse — frustrating investors betting on a quicker decline.
Rates shot up in 2022 and 2023 at the fastest pace in four decades as the central bank sought to contain surging inflation. Now, with price pressures easing and the economy still strong, Fed officials are prepared to bring rates down at a slower and potentially less regular pace.