What Fed’s Rate-Cut Delay Means for the US and the World

With inflation around the world proving stickier than almost anyone predicted, expectations for sharp cuts in interest rates are fading fast. Federal Reserve Chair Jerome Powell confirmed as much on June 12, when he and his fellow policymakers signaled there would be just one reduction in US benchmark rates in 2024.

Traders now see just one or two rate cuts happening this year. That’s a big letdown from the roughly six they expected at the start of the year and the three that Fed officials penciled in as recently as March. Some investors and economists say there’s a chance of no cuts at all this year. The delay in easing monetary policy — and keeping rates “higher for longer” — has big implications for the US economy, and is reverberating around the world.