Fed Cuts, Now What?

The Federal Reserve recently voted to cut interest rates, shaving 0.5% off the benchmark . (1)

Markets rallied exuberantly at the news, reaching new highs. (2)

Why did the Federal Reserve cut rates?

With inflation on a strong downward trajectory and concerns about economic weakness rising, the Fed clearly decided now was the right time to cut. The size of the cut was a surprise to many, who expected a quarter-point cut and could indicate that the Fed feels strong action is warranted. Some analysts believe lowering interest rates will lower the risk of a recession and increase the odds of a “soft landing” for the economy. (3)

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Inflation: A Simple Tuna Roll

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When it comes to grocery prices, some items have seen more dramatic changes than others. Take eggs and pork, for instance.

Although prices have dropped in recent months, egg prices in June 2024 were 10.2% higher than those in June 2023. (1) Meanwhile, pork prices increased by 3.81% from last year. (2)

These fluctuations show how unpredictable food prices can be. And when we look at more specialized items, like those used in sushi, the price changes can be even more striking. (3,4)