Elections may tweak sequencing of rate cuts

Jerome Powell, chairman of the US Federal Reserve, speaks during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, Dec. 13, 2023. The Federal Reserve held interest rates steady for a third meeting and gave its clearest signal yet that its aggressive hiking campaign is finished, forecasting a series of cuts next year. Photographer: Samuel Corum/Bloomberg

FEW central bank watchers think the electoral cycle will change the course of monetary policy – but it could complicate the precise timing of interest rate moves next year.

Now that markets seem convinced rate cuts are coming in 2024 in the United States and Britain, many are pondering just how elections in both countries may affect the sequencing – rather than the direction per se.