Federal Reserve 2024 Interest Rate Cut Schedule Revealed: Four Major Asset Impacts Investors Must Know

The Federal Reserve Chairman Powell recently signaled a clear dovish stance in the latest meeting, no longer insisting that inflation must fall below 2% before initiating rate cuts. This shift has attracted widespread market attention, causing fluctuations across various financial instruments. How will the US rate cut cycle unfold? What impacts will different asset classes face?

Complete Schedule of the 2024 FED Interest Rate Decision Meetings

The Federal Reserve holds 8 interest rate decision meetings each year, each lasting two days. Among these, 4 meetings will simultaneously release all committee members’ changes in their current and future interest rate expectations (dot plot) and their economic outlook assessments. These 8 decision days are considered the most critical workdays of the year for Wall Street.

The 2024 FED interest rate decision schedule is as follows:

Dot Plot Explanation: Represents the interest rate expectations submitted by 19 voting Federal Reserve officials. If an official expects a rate cut, it is marked as a downward adjustment; if they believe rates should stay the same, it remains unchanged. The distribution of the dots provides a visual indication of policy shifts.

How Are Rate Cut Expectations Adjusting in 2024?

As of the latest meeting on July 11, the Fed made a significant adjustment during the June 12 decision. Officials considered that inflation had not improved significantly and revised their projected number of rate cuts for this year from 3 to 1. This means that in 2024, only one 25 basis point rate cut is expected.

However, there is a silver lining. The Fed also raised its rate cut expectations for 2025 from 3 to 4 times. Overall, the rate cut cycle has not been canceled; it has merely been delayed.

Notably, Powell further softened his stance during an interview on July 9, publicly stating that “inflation is not the only condition for rate cuts, and delaying rate cuts too long could lead to a recession.” This remark signals a subtle shift in policy focus—no longer solely emphasizing the 2% inflation target, but seeking a balance between economic growth and price stability. As a result, markets anticipate that the actual magnitude and timing of US rate cuts may surpass current estimates.

Bonds Market Will Be the First to Benefit

The impact of rate cuts on the bond market is the most direct. When the risk-free rate (the benchmark rate banks borrow from the central bank) decreases, bond yields will also decline. Since bond coupon payments are fixed after issuance, a drop in yields means bond prices will rise, allowing investors to realize capital gains.

However, bond reactions vary depending on the maturity. Short-term government bonds (e.g., 2-year) typically reflect rate cuts only after they are officially implemented; long-term government bonds (e.g., 10-year) tend to react earlier, with yields already declining in anticipation of rate cuts.

Therefore, expecting rate cuts makes long-term bonds more profitable for capital gains, but if the goal is stable income, short-term bonds are more suitable.

Stock Market Benefits Are Conditional

On the surface, rate cuts increase investment attractiveness—lower deposit rates encourage individuals and companies to invest, leading to capital inflows into stocks. However, the reality is more complex.

From an economic fundamentals perspective, rate cuts are usually a response to recession risks or slowing growth. Under this background, corporate profit growth is likely to slow down. Even if large tech companies in the US are performing strongly and reaching new highs, if the trigger for rate cuts is the peak of corporate growth, the stock market may struggle to sustain a strong upward trend.

Whether the stock market rises depends on whether the stimulative effect of rate cuts can offset the negative impact of deteriorating economic fundamentals. A rate cut alone does not guarantee continued bullishness.

Forex Market: Increased Risk of US Dollar Depreciation

The US dollar is also an investment asset. When interest rates are cut, the return on dollar-denominated assets decreases, potentially prompting global capital to flow toward higher-yielding currencies or assets, putting downward pressure on the dollar. Generally, the USD tends to weaken during the start of a US rate cut cycle.

However, market foresight should not be underestimated. During the 2022 rate hike cycle, the USD index already reacted in advance—once signals of rate cuts appeared, the dollar index declined ahead of actual rate reductions. Therefore, investors need to monitor whether the actual magnitude and timing of US rate cuts meet or exceed expectations; if they fall short, the dollar’s depreciation outlook may be invalidated.

Gold Outlook: Short-term Optimism, Long-term Uncertainty

Rate cuts imply a decline in the dollar’s investment appeal, which traditionally boosts gold’s relative attractiveness, and gold prices tend to rise in the short term. However, this correlation mainly reflects short-term fluctuations.

In the long run, many variables influence gold prices—geopolitical tensions, real interest rates, dollar strength, industrial demand, and more. Relying solely on rate cuts as a long-term investment basis can be overly simplistic. Unless engaging in short-term trading, the relationship between gold and interest rates should be viewed as a supplementary reference rather than a core decision factor.

How Should Investors Respond?

Although a rate cut cycle is imminent, it does not guarantee stock prices will rise or bonds will necessarily increase. The key questions are:

Has the market already priced in this expectation? Financial markets are highly efficient, and information is often reflected in prices before official announcements.

Are there other hedging factors? A single positive news event cannot determine market direction; a comprehensive assessment of geopolitical situations, corporate earnings, inflation data, and other variables is necessary.

The most common trap for investors is making decisions based on a single piece of news. Only by thoroughly evaluating the market environment, risk factors, and asset allocation logic can one maintain a competitive edge in the rapidly changing financial markets. While US rate cuts are indeed an important signal, they are not decisive factors.