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Past Interest Rate Cut Cycles and 2024 Forecasts

This visualization looks at how past interest rate cut cycles have gone and the rate cut forecasts by top institutions for 2024.

A key question mark for the U.S. and global economy is around when the Federal Reserve will cut interest rates in 2024 and by how much.

After a rapid set of rate hikes throughout 2022, the U.S. Federal Reserve now faces the challenge of timing its easing of monetary policy to ensure a soft landing for the economy...(continue reading...)

Source: Visualized - Past Interest Rate Cut Cycles & 2024 Forecasts  |  2/22/2024
Visualized: Past Interest Rate Cut Cycles
and 2024 Forecasts

"In buying longer-term investments that paid more interest, SVB had fallen out of compliance with a key risk metric. An internal model showed that higher interest rates could have a devastating impact on the bank’s future earnings, according to two former employees familiar with the modeling who spoke on the condition of anonymity to describe confidential deliberations.

Instead of heeding that warning — and over the concerns of some staffers — SVB executives simply changed the model’s assumptions, according to the former employees and securities filings. The tweaks, which have not been previously reported, initially predicted that rising interest rates would have minimal impact." - The Washington Post - 4/2/2023

via the The Washington Post (subscription required) |   4/2/2023

"Monetary policy usually acts on the economy with ‘long and variable’ lags..." - Wall Street Journal - 11/21/2022

I posted a related look at rate movements here:

Rate shocks - a look at recent history

via the WSJ (subscription required) |   11/21/2022

"In the last 12 months, the Federal Reserve went from arguing that inflation was a transitory phenomenon to raising interest rates to fight runaway inflation by three percent in just six months.  The result is not only higher rates but the most severe..." - Banker To Banker - 10/28/2022

I posted a related look at rate movements here:

Rate shocks - a look at recent history

via the website SouthState Bank's Banker to Banker Blog   |   Posted 10/28/2022

"As U.S. inflation remains at multi-decade highs, the Federal Reserve has been aggressive with its interest rate hikes. In fact, rates have risen more than two percentage points in just six months." - The Visual Capitalist - 10/6/2022.

I posted a related look at rate movements here:

Rate shocks - a look at recent history

via the website Visual Capitalist   |   Posted 10/08/2022

"Our financial model predicts slow sales for years, followed by a huge surge in year ten... "

I just had to share. Here are my thoughts on the usefulness of a forecast beyond one-year:

via the website Dilbert by Scott Adams   |   Posted 01/03/2022

"Making predictions is a tricky business at the best of times, but especially so after a year of upheaval. Even so, that didn’t stop people from trying their hand at reading the crystal ball. If anything, the uncertainty creates a stronger temptation for us to try to forecast the year ahead." more...    |   via the website Visual Capitalist   |   Posted 01/05/2021

"Asset-liability management is often treated as a compliance exercise, not a decision engine. How can ALM help improve banks’ performance?" more...    |   via the website ABA Banking Journal   |   Posted 05/30/2020

Highlight from the OCC’s Fall 2013 Semiannual Risk Perspective more...    |   via the website Office of the Comptroller of the Currency   |   Posted 12/30/2013

OCC's Bulletin 2000-16 on Risk Modeling and Model Validation  | more...    |   Posted 4/30/2000

"The OCC, the Board, and the FDIC (collectively referred to as the agencies) are issuing this joint agency policy statement (policy statement) to bankers to provide guidance on sound practices for managing interest rate risk."  | more...    |   Posted 6/30/1996

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