The United States GDP grew by only 1.6% in the first quarter, marking the smallest increase in over two years. This has caused concern for the Federal Reserve, who have decided to keep interest rates at their current levels due to difficulty in accurately predicting inflation. Wall Street experts are debating when the Fed will potentially cut rates, with some predicting it may happen in 2024.
Harvard University’s Kennedy School of Government Professor Jason Furman recently spoke with Yahoo Finance about his perspective on the economy and whether the Fed will follow through with any rate cuts this year. Furman highlighted the surprise of core PCE inflation in the first quarter being at a 3.7% annual rate when it was previously expected to be at 2.1%. This unexpected increase is causing concern for the Fed, making it unlikely for them to cut rates anytime soon.
Furman, who served as the Council of Economic Advisors Chair during the Obama Administration, believes that the Fed will only consider cutting rates before December if there is a rapid deterioration in the job market. He emphasized that such a scenario is not what he expects or hopes for, but it is a contingency that could prompt the Fed to make changes to interest rates. For more expert insights and the latest market updates, viewers can watch the full episode by clicking
