**Fed Rate and Growth Outlook**
RSM economists have revised their outlook on Federal Reserve policy, now forecasting just one rate cut in 2024, likely in December, instead of the previously anticipated three. This adjustment is driven by persistent inflation and a robust labor market, which have both caused Fed officials to signal a more cautious approach to easing monetary conditions. The firm also updated its economic growth projections, maintaining a baseline forecast for continued moderate expansion, but raising the risk of a “stagflation-lite” scenario if inflation remains sticky and rate cuts are delayed further.
The analysis notes that inflation, as measured by the personal consumption expenditures (PCE) index, is running above the Fed’s target, while strong employment numbers have reduced the urgency for rate reductions. The potential for higher-for-longer rates means businesses and consumers may face tighter financial conditions through much of the year, impacting borrowing costs and overall economic momentum.
**Arizona Real Estate Impacts**
For real estate investors in Arizona, the prospect of delayed rate cuts suggests that mortgage and loan rates may stay elevated throughout 2024. This could moderate demand from both homebuyers and commercial investors, potentially leading to slower price appreciation or even price stabilization after years of rapid growth. Savvy investors should monitor interest rate trends and the local job market closely, as these factors will influence both property values and rental demand in key Arizona markets.
Read the original Personal Consumption Expenditures article, or, read more Arizona real estate news.