According to a recent Reuters survey of economists conducted April 17-21, the Federal Reserve is expected to wait at least six more months before cutting interest rates in 2024. The postponement reflects inflationary pressures stemming from the Middle East war, which has lasted approximately two months and drastically increased energy prices.
Survey Findings on Rate Expectations
In the April 17-21 survey, 56 out of 103 economists predicted that the policy rate would remain stable between 3.50% and 3.75% until the end of September. This represents a significant shift from late March expectations, when nearly 70% of surveyed economists anticipated at least one rate cut by September.
Nearly one-third of economists surveyed now believe there will be no rate cuts in 2024 at all—a figure that has almost doubled compared to the previous survey.
Inflation and Consumer Impact
Rising fuel costs have driven consumer confidence to record lows, erasing earlier market expectations of an early interest rate cut. Even the most dovish members of the Fed are now arguing that inflation remains “disturbingly high,” weakening the likelihood of rapid monetary policy easing.
Year-End Rate Cut Outlook
Despite near-term delays, most economists surveyed still expect at least one interest rate cut by the end of 2024. The median forecast is for a single rate cut, consistent with the Fed’s “dot plot” projections released last month.
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