WASHINGTON, Jan 18 (AFP): US businesses say they are "optimistic" about the prospect of falling interest rates, even as economic conditions have remained largely unchanged in recent weeks, the Federal Reserve said Wednesday.
The US Fed recently voted to keep interest rates at a 22-year high, while penciling in up to three interest rate cuts this year, citing progress made in tackling inflation.
In past weeks, businesses have sounded optimistic about the likelihood of lower rates in the months to come, the Fed announced in its regular update of economic conditions known as the "beige book."
"The prospect of falling interest rates was cited by numerous contacts in various sectors as a source of optimism," the Fed said in the update, published Wednesday.
This was despite the majority of the Fed's twelve regional districts reporting "little or no change in economic activity," since the last report was published in late November.
Contacts in almost all districts saw signs of a cooling labor market, while almost all of regions reported "decreases in manufacturing activity," the Fed report said.
Auto dealers reported concern about the cost of new vehicles-especially given the elevated cost of financing in a high interest-rate environment.
In the Cleveland region, "auto dealers continued to report slow sales because of high interest rates and high vehicle prices," the Fed said.
Although vehicle prices are down slightly from the all-time highs seen in 2022, the average transaction price of a new vehicle was still almost $49,000 in December, according to data from Kelley Blue Book.
US business ‘optimistic’ about interest rates cuts: Fed
FE Team | Published: January 18, 2024 23:09:09
US business ‘optimistic’ about interest rates cuts: Fed
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