Barkin pointed out the importance of the first quarter’s price adjustments in determining the future direction of monetary policy. Federal Reserve officials are of the view that the current lending rates, which have reached a range of 5.25% to 5.5%, represent a peak. They are contemplating three rate cuts throughout the year, aiming for a “soft landing” of the economy. This approach seeks to maintain subdued growth and declining inflation while avoiding significant job losses.
The anticipation of these potential rate cuts is based on the premise that the economy will continue to demonstrate positive signs, such as a normalization of the labor market and inflation rates nearing the Fed’s desired levels.
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