What if the US Federal Reserve chooses not to cut rates this year?

While the US Federal Reserve is looking for a compass between economic indicators, the most important of which is inflation data, to decide its direction to begin reducing interest rates in the second half of this year, investors and interested parties are wondering: What if the Fed chooses not to reduce interest rates this year? Especially with the emergence of voices from members of the Reserve Board of Governors calling for not to rush to reduce interest rates.

At the beginning of this year, the Federal Reserve Board’s deliberations repeatedly hinted at lowering interest rates in the coming months, starting in June, by a rate of three times in 2024, after the inflation rate reached levels close to the target rate, down from the highest levels recorded in more than 40 years at 9.1. percent in June 2022.

But the fear of the return of “inflationary winds” disturbed these deliberations in light of the rise in the cost of living and gasoline and the rise in the consumer price index to 3.2 percent on an annual basis last February, contrary to expectations that it would remain unchanged from its level in January at 3.1 percent.

This reality made the statements of US Federal Reserve Chairman Jerome Powell centered around a specific point that the date of reducing interest depends on the path of the economy, with a focus on maximum employment and price stability, so that Federal Reserve Board of Governors member Christopher Waller recently stated that “there is no reason to… “to rush to lower interest rates.”