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- Wall Street guru Jim Grant told Fox Business Network that money prices are “steady.”
- Grant said the Fed may cut rates sooner rather than later.
- Grant has been the editor of “Grant’s Interest Rate Observer” for the past forty years.
Market watchers expecting the US Federal Reserve to cut interest rates soon may be disappointed.
Jim Grant – who has been practicing “Grant’s Interest Rate Observer” for the last forty years – Fed chairman Jerome Powell is hoping to be cautious because rates remain above the central bank’s target.
“I think Chairman Powell is still upset about the Fed’s failure to announce rate hikes starting in 2020 and 21, and the last thing he wants to do is show it’s an early and early win,” Grant said. Fox Business Network on Tuesday.
In 2021, the Fed described the rate hike as “slow,” but the rate continued to fall to a four-decade high of 9.1% in June 2022 before tapering off.
“The climate is not the time,” Grant told the network. “It will last because you will not regain the purchasing power that you lost due to the price of goods”.
To control inflation, the Fed has raise interest rates 11 times since March 2022 to reduce spending and control inflation. Prices have remained the same since July.
Grant did not say when he expected the Fed to begin lowering rates, but said the move could be gradual and “later than the market expects” as it holds back the price drop in the region of its 2% target.
The US Consumer Price Index rose 3.1% on the year in November, the Bureau of Labor Statistics said on Tuesday.
Grant’s comments came ahead of the Fed’s indication on Wednesday whether it will maintain its hold on rate hikes.
At least one bank – ING – expects the Fed to cut rates early in the second quarter of next year. Meanwhile, Swiss bank UBS expects the Fed to cut rates by 275 basis points, or 2.75% percent, next year.
The Fed itself expects to cut interest rates by 25 basis points, or 0.25 percent, for all of 2024.