How many rate cuts in 2024? https://www.ft.com/conten.. One overriding fear is that of a “second wave” of inflation. If rates are cut and price growth surges back — as it did in the US in the 1970s — that would undermine central bankers credibility. Rate-setters need to be as clear-eyed as possible. With core inflation still around 3 to 5 per cent in the US, UK and eurozone, there is still work to do. But with the highly restrictive stance of monetary policy, and growing signs of cooling in labour markets, the risk of over-tightening has been picking up. This means central bankers may need to start cuts sooner than they currently convey, particularly as rate changes take effect with a lag. After pushing an “almost ready, but not yet” message, the Fed will most likely keep its policy unchanged at its meeting next week. Markets have pencilled in June for the first cut. With annual headline inflation remaining stubbornly above 3 per cent this year — and increasing in February — caution may be justified. But forward-looking inflationary indicators are weakening. Data this week showed a continued fall in small businesses’ hiring intentions — a solid predictor of wage growth and jobless claims. The purchasing managers’ index survey of output prices has also been strongly tracking US inflation, and implies easing pressures ahead.