The Fed's timeline for reducing interest rates remains uncertain.
This week, Federal Reserve officials will gather to discuss rates and set policy, with many expecting them to keep rates steady for the sixth consecutive meeting. However, what the central bank will do in the coming months remains unclear, leading to a wide range of predictions from analysts.
While some major banks, such as JPMorgan and Goldman Sachs, anticipate the first rate cut in July, others, like Wells Fargo, are more cautious, betting on a cut in September. Bank of America goes even further, predicting that the first cut won't happen until December. Some Fed policymakers have even floated the idea of a rate hike instead of a cut.
As it stands, the futures market predicts that the best chance of the Fed cutting rates is September, with a 44% chance of a cut compared to a 42% chance of another pause. The odds of an initial cut in November are lower.
Liz Ann Sonders, chief investment strategist at Charles Schwab, emphasized the need for clarity from the Fed, telling CNN in an interview that there needs to be an analysis of the conditions that would prompt rate cuts. She noted that economic forecasts can sometimes be off target, leading to uncertainty surrounding the timing and magnitude of future rate cuts.
Despite this uncertainty, the Fed remains focused on fighting inflation. With unemployment still below 4%, the central bank is tasked by Congress with stabilizing prices and maximizing employment. According to analysts, if inflation persists through May, it's unlikely that there will be a rate cut before July or September.
The labor market will be in the spotlight this Friday, when the Labor Department releases April data on monthly payroll growth, wage gains, and the unemployment rate.
Manufacturing in Mexico is having its moment, with the US and China both investing in the country as they reconfigure supply chains. As part of a trend known as "nearshoring," companies are bringing production facilities closer to home markets. This shift could benefit Mexico's manufacturing sector in the long term, according to Alberto Ramos, head of Latin American economics research at Goldman Sachs.
Mexico's manufacturing sector is particularly attractive to companies looking to avoid supply chain disruptions or decouple from China amid geopolitical tensions. In 2023, Mexico overtook China as the top exporter to the US, with exports driven by manufacturing, which accounts for 40% of Mexico's economy. US imports from Mexico increased in February, while Chinese exports to the US dropped by 20% in 2023 compared to 2022.
Can't afford internet? Rural, older Americans could suffer as affordable program runs out of money
Cindy Westman relies on the internet to manage her daughter's medical needs. But in her small, rural town of Eureka, Illinois, where the population is just 5,100, many residents struggle to afford home internet. Now, a vital federal program that helped make high-speed internet available to low-income families is running out of money, jeopardizing the connectivity of millions of Americans.
"It's the primary way I can communicate with healthcare providers for my daughter, who has cerebral palsy and autism. I can't just drive somewhere — I need the internet to message doctors, access test results, and schedule critical appointments," Westman told CNN.
The Federal Communications Commission's Emergency Broadband Benefit (EBB), which provides a $50 monthly discount on home internet service for eligible low-income households, is set to expire on March 1, after which funds will no longer be available for the discount program. While the federal government has allocated $14.2 billion for the EBB, it has already distributed $3.2 billion to internet providers, leaving only $11 billion left.
With a high demand for the program and limited funding, many low-income households risk losing their internet access altogether. These households include rural and older Americans who may not have the means to access high-speed internet and face additional challenges in connecting to essential services.
"I'm very concerned about what's going to happen to the people who rely on the EBB for home internet access. It's a lifeline for so many, and losing that could have disastrous consequences," Westman said.
While the EBB is set to expire, lawmakers in Congress have proposed extending it until 2024 to provide more time for funding to be secured. Others have suggested alternatives, such as subsidizing internet service for low-income families or creating an emergency fund to help pay off debts owed by internet providers. But with the program's expiration rapidly approaching, the future of affordable internet access for millions of Americans hangs in the balance.
"When out and about and she's feeling hungry, I'll feed her and then later come home for my own meal." Westman, a 43-year-old woman, shared her routine. "She's unaware of any other way, as she's been living with her developmental disability, only knowing her as the one who satisfies her hunger."
From 2021, Americans facing economic hardship, like Westman, have made do with the aid of the widely used federal program, the Affordable Connectivity Program (ACP). This initiative assists in bearing the cost of home internet service.
This program has been vital for Westman, relying on Social Security disability payments. The provided government credits, topping at $30 per month, enable her to cover the full extent of her internet expenses.
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Source: edition.cnn.com
