Fed Officials Caution Against Rate Cuts in 2024 Amid Inflation Concerns

According to recent statements from Federal Reserve Governor Michelle Bowman and various other officials, it is unlikely that the Fed will cut interest rates in 2024, barring any unexpected economic shocks. Bowman, who expressed caution over further rate cuts during an interview and a speech in Texas, cited persistent inflation as a reason for her stance. Other Fed members, including Dallas Fed President Lorie Logan and Minneapolis President Neel Kashkari, have similarly called for higher-for-longer rates. Despite leaving benchmark rates unchanged last week, Fed Chair Jerome Powell did not provide insight into when the central bank may decrease them. Bowman emphasized the importance of maintaining credibility in fighting inflation and cautioned that an economic shock could necessitate rate adjustments. Additionally, Bowman raised concerns around commercial real estate, specifically offices, due to the impact of remote work during the pandemic. Other notable news from Bloomberg includes reports of rising delinquencies in loans tied to officespace and a warning from Bowman regarding low liquidity in the Treasury market.