Investors initially anticipated the Federal Reserve to cut interest rates to around 4 percent by the end of 2024, but due to persistent inflation and strong economic growth, the outlook has shifted. Market pricing now suggests rates will likely end the year around 4.75 percent, with Fed officials expected to cut rates two or three times from the current 5.3 percent. Policymakers are cautious about balancing the need to avoid a recession with the risk of inflation. They are primarily focused on inflation and are considering factors like labor force growth and productivity for the longer term. Some Fed officials believe interest rates could remain higher than initially forecasted for 2024. If rates do stay higher, borrowing costs for mortgages and credit cards would likely remain elevated.