I have been arguing for some time that it might be a while before the Fed gets around to cutting interest rates; heck, I even opined it’s possible they could bump them higher again if they get a couple months of minor increases in inflation indexes, if only to “send a message” and try to cool things off.

Never mind that the 2% “target” is one which has rarely been achieved in real life, with the exception of the past few years, an anomalous period in interest rate history for sure.

Anyway, Barron’s says maybe no cuts this year, owing to various factors, not the least of which is the upcoming elections when the Fed is loathe to do anything lest it look “political”, but there’s also the real world data that shows inflation slowing, but still not anywhere near the mythical 2% target.

barrons.com - Fed powell interest rate cuts projection

The Fed Won’t Cut Rates This Year

Federal Reserve Chairman Jerome Powell and his team had hoped to lower rates in 2024. But sticky inflation, a strong economy, and calendar quirks are thwarting their plans.

 The Federal Reserve isn’t likely to lower interest rates in 2024.  
Elevated inflation, a resilient economy, and a still-strong, if softening 
labor market argue against the need for easing monetary policy, especially 
as these conditions are expected to persist through year end.

The Federal Reserve isn’t likely to lower interest rates in 2024.  
Elevated inflation, a resilient economy, and a still-strong, if softening 
labor market argue against the need for easing monetary policy, especially 
as these conditions are expected to persist through year end.

Nor is an increase in interest rates seriously in the cards. Despite an 
inflation scare earlier in the year, the rate of price growth continues 
to move, slowly, in the right direction, heading toward the Fed’s 
2% annual target. That means the central bank can keep its federal-funds 
rate target, for now, in the range of 5.25% to 5.50%, where it has been 
since July 2023—and the stock market might not mind.

Think of the Fed’s policy stance as higher for longer than almost 
anyone anticipated, because the U.S. economy has been stronger for 
longer than almost anyone imagined.