The Federal Reserve is expected to start lowering interest rates in the coming months, as inflation approaches its target of 2%. 

The Federal Reserve Chair Jerome Powell has discussed the timing that would be deemed „suitable“ for the Federal Reserve to commence reducing interest rates. 

Traders and experts are divided on the Fed's interest rate reduction timing, with some anticipating it in March and others suggesting a later date.

The US experienced a 2.5% growth rate from January to December, showcasing the resilience and consistent growth of the largest global economy.

The Federal Reserve's preferred gauge of inflation has fallen below 3 %, and the unemployment rate has remained at historically low levels. 

The decrease in federal interest rates can significantly decrease consumer loan expenses, thereby enhancing the affordability of various purchases.

The Biden administration anticipates increased consumer trust in the economy to boost Democrats' votes, while Republicans anticipate discontent over past inflation to shift support.

Futures traders currently anticipate a minimum of five interest rate reductions this year, with a probability of nearly 90% to the first rate cut occurring by the May interest rate decision.