Two reasons for the Fed cut rates in 2024 - Skip to content

Two reasons for the Fed cut rates in 2024


Is the Federal Reserve’s plan to sustain higher interest rates a viable strategy? That’s the big question, especially if it risks damaging the U.S. economy. However, most media outlets reassure that everything is on track. They anticipate the Fed successfully curbing inflation to its target rate by 2024 without plunging us into a severe recession.

Though there’s a consensus that the Fed will eventually change its rate policy, there’s a split in views on why they might cut rates. The prevailing belief is that the Fed will likely reduce rates in 2024 after securing a smooth economic slowdown—a notable accomplishment considering the historic pace of interest rate hikes.

Yet, there’s an alternative view expressed by analysts at Morgan Stanley and UBS. They foresee rate cuts next year, not because the Fed orchestrated a soft landing to slow the economy and dodge a recession. Instead, according to UBS economists, the U.S. economy could face a full recession or a hard landing in the coming year, compelling the Fed to slash the overnight rate by 275 basis points throughout the year—almost quadruple what the stock market has factored in. Their forecast suggests the fed funds rate could plummet from 5.5% to 2.375% by the end of 2024.

The fact that the Fed has…

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Editor in Chief:
As a prominent commentator and Editor in Chief at, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.
Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.
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