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Experts discuss likelihood of rate cut as Fed convenes this week.

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Americans are feeling the financial strain of elevated costs across all loan types, as interest rates have steadily increased over the last two years due to actions taken by the Federal Reserve. Many are now eagerly awaiting news on when the central bank will begin cutting rates to provide some relief to borrowers. However, experts predict that there won’t be any rate cuts this month, nor at the subsequent meeting in May, with June being the anticipated timeline for the first rate reduction in four years.

The Fed’s decision to start raising rates dates back to 2022 in response to heightened inflation during the pandemic, hitting a 40-year high in June of that year. While inflation has since tapered off, it remains above the Fed’s target level, leading economists to believe that rates will stay put for now. Despite expectations of no immediate rate cuts, the Fed’s upcoming economic outlook may offer insights into the timing of future adjustments, with Chairman Jerome Powell’s post-meeting press conference likely to provide crucial guidance.

Although inflation in 2024 has decreased significantly from its peak, it remains higher than pre-pandemic levels, contributing to the Fed’s cautious approach towards rate reductions. Powell and other Fed officials are keen on avoiding a hasty rate cut that could reignite inflation, emphasizing the need for concrete evidence of sustainable economic improvement before any policy adjustments. While consumers may have to endure high borrowing costs for now, the absence of immediate rate hikes provides a silver lining for savers, who can take advantage of high-yield savings accounts or CDs for enhanced returns on their investments.

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