Economic Update: Sitting on the Fence

In the northern hemisphere they are savouring the final days of summer and returning from the long school holiday break. Market watchers, however, are looking ahead to 2024 for clues about the path of interest rates which will be dictated by the path of inflation. Economists expect the Federal Reserve to begin cutting interest rates at some point next year, but conviction appears low.

The Fed began its rapid fire of rate hikes in March 2022, when inflation was approaching its highest level in four decades. Interest rates have now moved 5% higher to between 5.25% and 5.5% and the outlook appears much healthier.  August job reports released last week showed signs of a cooling labour market which is a sign that the Fed’s hiking campaign is having its intended effect.

So, with the US central bank currently on pause, when will they start to ease, or will the next move be up? Consensus is for rate cuts sometime in 2024.

Click here to read the full article.  230911_NewsFeed_RoystonCapital.pdf (333 downloads )