Expert insight
Why the Fed might choose to forgo rate cuts
March 04, 2024
The Federal Reserve has done a remarkable job in bringing down inflation. But with a surprisingly strong economy and labor market, it may be premature for the Fed to cut interest rates this year.
In a guest column for Barron’s, Joe Davis, Vanguard's global chief economist, said that instead of a hard or soft landing for the economy, there’s an overlooked third alternative—no landing at all. Conditions evoke a similar landscape nearly 60 years ago, when the U.S. economy overheated after rate cuts and the Fed had to raise rates aggressively in response.
(Note that Barron’s content is available by subscription only.)
Not a Barron’s subscriber? Access more insights from Vanguard economists through the links below.
Related links:
- Our investment and economic outlook (article, issued February 2024)
- Reasons for caution about U.S. equity valuations (article, issued February 2024)
- The buoyancy of bonds (1-minute video, issued February 2024)
- Vanguard’s economic and market outlook for 2024 (3-minute video and article, with links to more detailed regional outlooks, issued December 2023)
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