Market Update: Chart of the Month - May 2024

Ten months have passed since the Federal Reserve last raised interest rates. The pause in rate hikes follows a 17-month period where the central bank raised interest rates by +5.00%. It was the fastest and most aggressive rate-hiking campaign in decades, but the focus is shifting to interest rate cuts as the central bank prepares to make its next policy move. The dashed lines in Figure 1 show the timing of anticipated rate cuts. At the beginning of 2024, investors expected the Federal Reserve to start cutting interest rates in March. It’s now mid-May, and March passed without an interest rate cut.