It's been two weeks since the Federal Reserve decided to cut its key interest rate for the first time since 2020 during the Covid-19 pandemic.
The decision brought the Fed's Federal Funds Rate down to 4.75% to 5% from 5.25% to 5.5%, a level that was in place from summer 2023.
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The hope is that progress on inflation will bring rates down for everyone, helping businesses dependent on the cost of credit, home buyers, home sellers and others.
This week many Fed officials, including Chairman Jerome Powell, have been offering hints in speeches on what's ahead.
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Here's a quick synopsis.
Jerome Powell, speech to the National Association for Business Economics on Monday. Powell said he saw two more rate cuts in 2024 — 0.25 percentage point at meetings in November and December. The economy is in good shape, he told the group, meeting in Nashville. And bigger cuts did not appear to be warranted, he said. Wall Street sold off on the news.
Raphael Bostic, president of the Atlanta Federal Reserve Bank. He sees rates coming down half a point in November if job growth shows signs of slowing more than expected. Otherwise, he thinks quarter-point cuts are appropriate in a campaign that would bring the Federal Funds Rate down to 3% to 3.25% by the end of 2025. That might translate into mortgage rates well under 6%.
Michelle Bowman, Fed governor, speaking Monday, Sept. 30, at the Georgia Bankers Association meeting in Charleston, S.C. Bowman was the one dissenter in the Fed's Sept. 18 rate decision. She objected to the half-point cut, thinking it was too big and could generate new inflation pressures. She did support a rate cut, given the Fed's success in lowering domestic inflation.
Lisa Cook, Fed governor. Speaking at Ohio State University on Tuesday, Oct. 1. Cook spoke on the potentials and concerns about artificial intelligence. She says AI will ultimately boost the economy because so many tasks done by rote can be automated and productivity will improve. But she cautioned about betting that the benefits will come quickly and cheaply. And she said "a consensus needs to be forged on the benefits and costs of regulation of the use of AI in the areas of privacy, compensation for training data, perpetuation and amplification of bias, and fraud."
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Coming up on Wednesday:
Thomas Barkin, president of the Richmond Federal Reserve Bank, at the 2024 WilmingtonBiz Conference and Expo in North Carolina. He was slow in coming around to cutting rates. But he did support the September rate-cut decision. He may offer some thoughts on the dockworkers strike on the East and Gulf Coasts and how long it will take the southeastern U.S. to recover from the damage caused by Hurricane Helene.
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