{"id":2326687,"date":"2024-08-19T09:58:58","date_gmt":"2024-08-19T13:58:58","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/everyday-economics-just-how-many-fed-rate-cuts-are-too-many-washington-examiner\/"},"modified":"2024-08-19T10:03:23","modified_gmt":"2024-08-19T14:03:23","slug":"everyday-economics-just-how-many-fed-rate-cuts-are-too-many-washington-examiner","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/everyday-economics-just-how-many-fed-rate-cuts-are-too-many-washington-examiner\/","title":{"rendered":"Everyday Economics: Just how many fed rate cuts are too many? &#8211; Washington Examiner"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Feveryday-economics-just-how-many-fed-rate-cuts-are-too-many-washington-examiner%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2326687&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>In the article titled \u2062&#8221;Everyday Economics: Just \u200chow many \u2063fed rate cuts \u2062are too many?&#8221; from The Center Square, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bank-of-america-strategists-expect-economic-hard-landing-to-pummel-markets\/\" title=\"Bank of America Strategists Expect Economic \u201cHard Landing\u201d to Pummel Markets\">recent economic indicators suggest<\/a> a\u2064 mixed outlook for the U.S. \u2064economy. Retail sales exceeded expectations with a 1.0% increase \u2063in July, alongside\u200b a\u2064 year-over-year rise of\u200b 2.7%. Additionally, unemployment\u200d claims continued to decline, indicating a resilient labor market.\u200b However, there are concerns about\u200d significant \u2062drops \u200bin construction \u200bspending and housing starts, with housing \u2063starts down\u2062 6.8% \u200din July and 16% compared to the previous year. This decline has led to a revised forecast\u200d by the Federal Reserve Bank of Atlanta predicting a drop \u200cin <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-recession-is-here-atlanta-fed-predicts-negative-second-quarter-economic-growth\/\" title=\"The Recession Is Here: Atlanta Fed Predicts Negative Second Quarter Economic Growth\">gross private domestic investment growth<\/a>. Despite these challenges, the construction sector remains robust with over 1.5 million homes under construction and construction wages outpacing overall wage growth. The article\u2064 concludes that while the economy is experiencing a slowdown, lower inflation continues to support households and businesses, suggesting a still relatively healthy economic environment. Upcoming\u2063 data \u200don \u2062home sales is anticipated to reveal slight \u2062improvements.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<p><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><\/p>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-header-search-button-mob dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-mobile-search-icon td-icon-search\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><span class=\"tdb-mobile-menu-button\"><i class=\"tdb-mobile-menu-icon td-icon-mobile\"><\/i><\/span><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tdb-drop-down-search\" aria-labelledby=\"td-header-search-button\">\n<div class=\"tdb-drop-down-search-inner\">\n<form method=\"get\" class=\"tdb-search-form\" action=\"https:\/\/www.washingtonexaminer.com\/\"><\/form>\n<div class=\"tdb-aj-search\"><\/div>\n<\/div>\n<\/div>\n<p><a href=\"http:\/\/www.washingtonexaminer.com\/#\" role=\"button\" aria-label=\"Search\" class=\"tdb-head-search-btn dropdown-toggle\" data-toggle=\"dropdown\"><i class=\"tdb-search-icon td-icon-search\"><\/i><\/a><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<h1 class=\"tdb-title-text\">Everyday Economics: Just how many fed rate cuts are too many?<\/h1>\n<div><\/div>\n<div class=\"tdb-title-line\"><\/div>\n<\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\">\n<div class=\"tpd-featured-video\">\n<div id=\"Brid_22452\" class=\"brid\" style=\"width:1280;height:720;\"> <\/div>\n<\/div>\n<p>(The Center Square) &ndash; Retail sales surpassed expectations, rising 1.0% in July, and were up 2.7% from a year ago. Both initial and continuing unemployment claims fell again, indicating a resilient labor market. While this is good news, the significant decline in construction spending and housing starts may have reignited growth concerns.<\/p>\n<p>Historically, housing starts have been an excellent predictor of changes in economic activity and business cycles. According to the U.S. Census Bureau, housing starts fell 6.8% in July and were 16% below last year&rsquo;s level. Following the latest housing starts data, the Federal Reserve Bank of Atlanta&rsquo;s nowcast of third-quarter real gross private domestic investment growth dropped from 0.0% to -2.4%. Residential investment tends to contribute most to economic weakness before recessions.<\/p>\n<p>However, this time could be different. Builders, roofers, framing contractors, and even cabinet makers haven&rsquo;t run out of work yet. There were more than 1.5 million homes under construction in July. While down from the pandemic peak, there are still more homes being built than anytime since the 1970s. Although residential building employment growth may be slowing, it remains high. Over the past year, construction sector hourly earnings grew by 4.3%, outpacing the 3.6% increase for all private-sector workers.<\/p>\n<p>While the economy is slowing from a torrid pace, it remains in pretty good shape. Why? Lower inflation is a tailwind for households and businesses.<\/p>\n<p>This week&rsquo;s existing and newly built home sales data release is expected to show a slight improvement. However, a stronger-than-expected rebound wouldn&rsquo;t be too surprising, given that wages are now rising faster than housing costs.<\/p>\n<p>The Fed will also release the minutes of the July FOMC meeting, which will likely shed light on an increasingly divided committee.<\/p>\n<p>Speeches by Fed officials, including the Jackson Hole Fed chair&rsquo;s address, are likely to hint at the possibility that the first of many rate cuts could be just around the corner. However, even though inflation is moving in the right direction, the Fed is in no rush to lower rates &ndash; first, because <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gdp-revised-revised-down-to-2-1-annual-rate-in-second-quarter\/\" title=\"GDP downgraded to 2.1% annual rate in Q2.\">economic growth remains strong<\/a>, and second, due to uncertainty surrounding the neutral rate of interest, the real interest rate that is neither expansionary nor contractionary when the economy is at full employment. Although most central bankers agree that policy is currently restrictive, they are unsure how much to lower the policy rate to prevent it from becoming too accommodating.<\/p>\n<p><strong><a href=\"https:\/\/www.washingtonexaminer.com\/\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/strong><\/p>\n<p>So just how many rate cuts should we expect?<\/p>\n<p>Markets still anticipate 3 quarter point rate cuts before year&rsquo;s end and the Fed funds rate falling to the 3.50-3.75% target range by July 2025.<\/p>\n<p> <script data-cfasync=\"false\" src=\"http:\/\/www.washingtonexaminer.com\/cdn-cgi\/scripts\/5c5dd728\/cloudflare-static\/email-decode.min.js\"><\/script><script>!function(){var g=window;g.googletag=g.googletag||{},g.googletag.cmd=g.googletag.cmd||[],g.googletag.cmd.push(function(){g.googletag.pubads().setTargeting(\"has-featured-video\",\"true\")})}();<\/script><script>var _bp=_bp||[];_bp.push({\"div\":\"Brid_22452\",\"obj\":{\"id\":\"27789\",\"width\":\"1280\",\"height\":\"720\",\"stickyDirection\":\"below\",\"playlist\":\"22452\"}});<\/script><script defer src=\"https:\/\/services.brid.tv\/player\/build\/brid.min.js\"><\/script><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<div class=\"tdb-block-inner td-fix-index\"><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Everyday Economics: How many rate cuts are too many? (The Center Square) \u2013 Retail sales exceeded forecasts, increasing by 1.0% in July and up 2.7% compared to the previous year. Initial and continuing unemployment claims also decreased, suggesting a strong labor market. However, the notable drop in construction spending and housing starts may have reignited concerns about economic growth. Historically, housing starts have been a reliable indicator of shifts in economic activity and business cycles. The U.S. Census Bureau reported that housing starts fell by 6.8% in July and were down 16% from last year\u2019s figures. Following this data, the Federal Reserve Bank of Atlanta revised its forecast for third-quarter real gross private domestic investment growth from 0.0% to -2.4%. Residential investment typically signals economic weakness before recessions; however, this situation might be different as builders, roofers, framing contractors, and cabinet makers still have plenty of work lined up with over 1.5 million homes under construction as of July\u2014though this is lower than during the pandemic peak\u2014it remains higher than any time since the 1970s.<\/p>\n<p>While job growth in residential building may be slowing down, it is still robust; hourly earnings in the construction sector rose by 4.3% over the past year compared to a 3.6% increase for all private-sector workers combined. Although economic growth is decelerating from an exceptionally fast pace, it remains relatively stable due to lower inflation benefiting households and businesses alike.<\/p>\n<p>This week\u2019s data on existing and newly built home sales is anticipated to show slight improvement; however, an unexpectedly strong rebound wouldn\u2019t be surprising given that wages are now increasing faster than housing costs.<\/p>\n<p>The Fed will also release minutes from its July FOMC meeting which are expected to reveal divisions within the committee regarding future policy directions while speeches from Fed officials\u2014including one from Jackson Hole\u2014may suggest that initial rate cuts could soon be on the horizon.<\/p>\n<p>Despite inflation trending positively downward, there\u2019s no urgency for rate reductions because economic growth continues robustly alongside uncertainties about what constitutes a neutral interest rate\u2014the level at which monetary policy neither stimulates nor restricts economic activity when employment levels are optimal.<\/p>\n<p>While most central bankers agree current policies are restrictive overall uncertainty persists regarding how much they should reduce rates without making them overly accommodating.<br \/>\nSo how many rate cuts can we expect? Markets currently predict three quarter-point reductions before year&#8217;s end with expectations for the Fed funds rate dropping into a target range of 3.50-3.75% by July 2025<\/p>\n","protected":false},"author":1,"featured_media":2326688,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/05\/iStock-157308559-1024x683.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[13123,32663,36435,33477,38541],"class_list":["post-2326687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner","tag-economics","tag-federal-reserve","tag-financial-news","tag-interest-rates","tag-monetary-policy"],"fifu_image_url":"https:\/\/www.washingtonexaminer.com\/wp-content\/uploads\/2024\/05\/iStock-157308559-1024x683.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2326687","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2326687"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2326687\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2326688"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2326687"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2326687"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2326687"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}