Carolina Guerreno | Navigating the Economic Landscape of 2024: A Review and Projection

 As consumers grapple with high inflation levels amidst the ongoing post-COVID economic recovery, the performance of the economy in the first quarter takes center stage. Let’s delve into the major economic factors shaping the landscape and discuss projections for the 2024 economic outlook. 


Interest Rates 

Interest rates stand out as one of the most significant factors impacting the economic landscape for 2024. With 11 rate hikes in 2023 aimed at curbing inflation, costs associated with purchasing homes, cars, and borrowing money soared. 

In 2024, all eyes are on the Federal Reserve as we await developments in interest rates. Following the recent meeting in March, it was decided to maintain interest rates for the fifth consecutive meeting. Additionally, projections indicate three rate cuts in 2024 as inflation edges closer to the targeted 2% mark. 

The first quarter of 2024 has seen a lower inflation rate compared to the same period last year, signaling positive progress. First Trust anticipates rate cuts to commence in June, offering hope for consumers in the months ahead. 

Housing 

The housing market is another pivotal factor in assessing our economic outlook. With the Federal Reserve keeping rates steady, mortgage rates are likely to follow suit, delaying affordability for homebuyers. As of March 21, the average 30-year fixed mortgage rate sits at 6.87%. 

Experts predict mortgage rates to decrease over 2024 following rate cuts by the Federal Reserve. Furthermore, February saw the largest gain in home sales in a year, hinting at a potential recovery in the housing market — an encouraging sign for economic progress. 

Inflation 

Inflation has been a persistent challenge for consumers in recent years, straining budgets. While still not at desired levels, this year’s February inflation rate of 3.2% marks progress compared to last year’s 6%. However, February did witness a slight increase in inflation compared to January. 

Although inflation is slowing down, reaching the desired 2% remains challenging. Economists project a decrease to 2.4% by year-end, offering hope for consumers. Managing inflation continues to be a strategic concern, especially for those nearing retirement.

Location: Buenos Aires, Argentina

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