The Fed’s June 2024 decision marks the seventh consecutive pause after 2022-2023’s aggressive hikes. While inflation has cooled from 9% to 3.4%, policymakers want more confidence before cutting rates. This means borrowers won’t see relief yet – mortgage rates remain near 7%, and credit card APRs stay at record highs.
Savvy savers can still lock in 5%+ yields on CDs and high-yield savings accounts. The “higher for longer” environment favors value stocks over growth stocks in the near term. Bond investors should focus on short-duration funds while waiting for potential rate cuts later this year.
Looking ahead, the Fed’s dot plot suggests just one 0.25% cut in 2024, down from three projected in March. Markets now price in a 65% chance of a September cut, contingent on upcoming jobs and inflation data.
