No More Rate Cut in March

Wall Street is losing hope on seeing the first rate cut in March 2024 after the latest meeting of US Federal Reserve officials that lean toward a more prudent move on restrictive monetary policy.

At the first meeting of the US Federal Reserve in 2024 on Wednesday, officials left interest rates unchanged between 5.25-5.5 range, which is in line with the market expectation. However, the Fed signalled that it is not ready to start cutting rates as soon as the next meeting that is scheduled to be held in late March.

The US central bank stated that risks to goals are moving into better balance as officials voted to maintain its pace of quantitative tightening, while planning to start in-depth discussion of the balance sheet in March.

Hopes for a rate cut in March has shrunk as the Fed signalled that it is not looking to cut rates in the next meeting as the move is not appropriate until the central bank gains more confidence that inflation is moving sustainably toward 2%.

The probability for a rate cut by 25 basis points in March has plummeted to 37% after the meeting, down from 50% before the meeting started and 80% last year.


Prior to the meeting, Goldman Sachs was the only major investment bank in the market that still believes the Federal Reserve will cut its policy rates in March and sees five interest rate cuts in total in 2024.

After the meeting, the US investment bank has shifted its position, saying that it pushed the first rate cut to May but still expected to see a total of five cuts this year.


Meanwhile, the Bank of America pushed out its first rate cut to June, saying that risks to a “later and faster” policy easing cycle are rising. A cut in March is no longer the base case for the market.

A 25 basis points rate cut will follow in September and December, which would total three cuts this year. The bank expected to see a total of 100bps rate cut in 2025.