US Inflation is Falling – Will The FED Cut Interest Rates Soon?

Aug 16, 2024

The US Inflation Rate Dropping - Will Interest Rates Follow?

The US interest rates have been flying high since March 2022, with the last incremental taking place in July 2023. However, we might be on the brink of the first time after 30 months.

The spiking inflation rates in the United States seem to have calmed down, raising the speculations for a FED rate cut. However, this anticipation has been building up for a couple of months. Will it finally happen? Let’s analyse what happened and what the predictions are.

July Inflation Rates in The US

The month-to-month inflation reports showed a slight improvement in the July figure as the price inflation dropped to 2.9%, which is only a 0.1% decrease from the previous month.

However, the economy recorded the first drop under the 3% mark for the first time since March 2021, suggesting a noticeable economic progress.

It is hard to point out the factors contributing to this decline due to the complexity of the US economy and internal political and social state. However, the state suggested that slowing housing and rental costs and slower grocery price growth are distinct reasons behind the July inflation rate.

How are Inflation and Interest Rates Correlated?

This slight improvement in inflation figures suggests a potential lending rate cut. Why is that?

Interest and Inflation rates have always been connected. Central banks impose higher interest rates when inflation increases to deter excessive spending and slow economic growth. Conversely, when inflation rates drop, a lower interest rate will encourage spending and stimulate economic growth, although proportionally.

Are FED Interest Rate Cuts Coming Soon?

The interest rate cuts in the US are overdue, and investors have been waiting for this news since March 2024, when the CPI dropped under the 3.5% mark. However, the Federal Reserve has been cautious about this move in anticipation of better inflation numbers.

The US central bank imposes a high 5.5% interest rate, which helped slash the inflation rate from 6.4% to 3.4% in 2023. However, the recently reported drop is expected to result in an interest rate cut in September.

Despite being based on speculations, economic specialists and insiders are highly optimistic about the upcoming lending rate drops, raising the possibility of this decision to 60-80%. However, the discussion now revolves around the nature of this drop, whether by 0.25% or 0.50%.

Impact on EU and UK Banks

The US bank policies affect global economies, especially in Europe and the UK, as these regulators try to align their financial policies with the US to avoid market manipulation and changing currency strength.

The Bank of England imposes a similarly high interest rate at 5%. However, the UK regulators are reportedly waiting for the inflation rate to reach a target figure of 2% before introducing a new rate reduction.

However, the ECB introduced rate cuts in June 2024, driving the base refinancing rate from 4.50% to 4.25% and the marginal lending rate from 4.75% to 4.50%.

Conclusion

US investors and institutions await a possible interest rate cut to come in September after 2.5 years. This anticipation comes after the US inflation rate decreased to 2.9% in July reports. However, the US regulator is cautious about this step, raising the speculations and potential outcomes after the decision.

Subscribe Our Newsletter

Singapore's Grab Soars 18.6 Percent On Nasdaq Debut Following SPAC Merger
Singapore’s Grab Soars 18.6 Percent On Nasdaq Debut Following SPAC Merger

After making its launch on the Nasdaq Stock Market, Grab Holdings, Southeast Asia's most expensive technological startup, soared 18.6% to $13.06 in opening trade on Thursday.

Stocks
Meta’s Earnings. Wall Street Is Cutting Its Revenue Forecasts
Meta’s Earnings Are Wednesday. Wall Street Is Cutting Its Revenue Forecasts

The social media titan is still battling a less aggressive advertising market, competition from TikTok, and the continuing impacts of Apple's (AAPL) more aggressive approach to safeguarding iPhone users' privacy. In an effort to make its Facebook experience more like TikTok, Meta recently scaled back its employment goals and released a new version of its main Facebook experience.

Companies
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Constantine

5 Most Successful FinTech Industry Startups in 2022
The financial services industry is undergoing a paradigm shift as a result of technological advancements, which are actively displacing traditional players and traditional business models. Significant changes are achieved through the integration of new financial solutions, reduction in the cost of certain functions, improvement in efficiency and quality of business, and a positive impact on the sustainability of core business development.

discover
What Are Index Funds? Investment Guide

Constantine

What Are Index Funds, and How do you invest in them?

Learn what index funds are, what varieties they come in, what advantages they offer, and how to start investing from scratch and make your first profit.

Investing
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors

    Hazem

    The Cup and Handle Pattern – How Trade Using This Bullish Indicator?

    Cup and Handle Pattern – How to Predict Price Breakouts?
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.