MEEDER PUBLIC FUNDS
Monthly Commentary
September 2024
OBSERVATIONS AND EXPECTATIONS
• The Fed started the rate-cutting cycle with a 50-basis point cut September 18th • Chair Powell said the Fed may slow the pace of upcoming cuts • Fed’s preferred inflation gauge rose slightly during the latest reporting period • Job growth has been slowing in recent months
• Short-term rates declined more than longer rates during September SOURCES: BLOOMBERG, BUREAU OF ECONOMIC ANALYSIS
The September Rate Cut…What Will the Future Hold?
SOURCES: FEDERAL RESERVE, BLOOMBERG
Inflation’s Rate of Change is Nearing the Fed’s Target
• Since the 1980s, the
Fed’s most used
rate hike or cut has
been .25% or 25
basis points.
• However, the Fed
stated the Fed
Funds rate was too
restrictive and
warranted a 50-
basis point cut in
September to start
this cutting cycle.
• Core Personal Consumption
Expenditure YoY is the
Fed’s preferred inflation
gauge. Core excludes food
and energy components.
• Core PCE YoY is currently
at 2.7%, not quite at the
Fed’s 2% target, but far
below the 5.6% peak in
2022.
• The Fed expects Core PCE
YoY will most likely get
much closer to the Fed’s 2%
in the first half of 2025.
2.68%
0%
1%
2%
3%
4%
5%
6%
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
Sep-24
Dec-24
Core PCE YoY
Fed’s 2% Target
0 0.1
0.2 0.3
0.4 0.5
0.6 0.7
0.8 0.9
1 0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
19851987198919911993199519971999200120032005200720092011201320152017201920212023 Fed Funds History
Job Growth Has Slowed in Recent Months
The Fed’s September Cut Pushed Short-Term Rates Down More Than Longer Rates SOURCE: BLOOMBERG
SOURCES: BLOOMBERG, BUREAU OF LABOR STATISTICS
0 100
200
300
400
500
600
700
800
900
1000
Jan-21
Mar-21
May-21
Jul-21
Sep-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Sep-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Sep-23
Nov-23
Jan-24
Mar-24
May-24
Jul-24
Thousands
Nonfarm Payrolls
Nonfarm Payrolls (000s) 3M Avg
3.40 3.90
4.40 4.90
5.40 3M 6M 1Y 2Y 3Yr 5Y 7Y 10Y 20Y 30Y
Percent
U.S. Treasury Yield Curve Change
9/30/24 8/31/24
(49)
(45)
(40)
(28)
(23)
(15) (15) (12) (11) (8)
-60
-50
-40
-30
-20
-10
0 3M 6M 1Y 2Y 3Yr 5Y 7Y 10Y 20Y 30Y
Basis Points
Basis Point Change
• Chair Powell
highlighted at the
recent Fed Press that
the labor markets
remain solid but has
slowed.
• With inflation near the
Fed’s target rate, their
primary goal is to now
help job growth to
stay positive.
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© 2024 Meeder Investment Management, Inc. 0250-MPF-4/12/24