Get the latest insights on why interest rates aren't dropping in 2024.
Despite hope early in the year that interest rates would fall, it looks like they aren’t going down any time soon. Inflation, unemployment, and consumer spending all play roles in this scenario. Here are three reasons why interest rates are not coming down in 2024:
1. Inflation. Although inflation has decreased to around 3%, the Federal Reserve’s target is 2%. The stubborn gap between 2% and 3% is a reason the Fed has little incentive to lower interest rates. We expect interest rates to remain steady through the third quarter of this year.
2. Low unemployment. With unemployment hovering around 3.9%, the Fed sees no urgency to reduce rates. A strong job market means there’s less pressure to stimulate the economy by making borrowing cheaper.
3. Consumer spending. Despite high-interest rates, consumer purchasing remains strong, indicating a healthy economy. This continued spending gives the Fed little reason to adjust rates downward.
While these economic factors suggest that interest rates will stay between 6% and 7%, keep an eye on the upcoming election, as it could influence future rate decisions. If you have any questions or need more information, feel free to reach out to our team. We're here to help!
