Tim Murray, Capital Market Strategist at Purves Multi-Asset Department, published an analysis on the possibility of the Fed cutting interest rates in 2024. He pointed out that history shows that if the economy avoids a recession, the federal funds rate will be moderately reduced, which is broadly in line with market expectations, but inflation and the labor market will be key factors. If inflation continues to trend downward as it currently is, the Fed may be more willing to cut rates moderately, as reflected in current market expectations of rate cuts. However, if inflation heats up again, the Fed will be forced to significantly slow down rate cuts, possibly only cutting rates once or keeping rates unchanged. If the labor market experiences significant pressure, the Fed may act quickly to avoid an economic downturn. Tim Murray stated that the Federal Open Market Committee unexpectedly signaled a dovish tone at its meeting in December last year, indicating a potential rate cut in the future. By the end of December 2023, the market predicted that there was over an 80% chance of a rate cut at the March FOMC meeting. However, in January of this year, the optimism for a rate cut has cooled off, with the market discussing the Fed's next steps and focusing on two main questions: when will the Fed start cutting rates and how many times will it cut rates in 2024. Looking back at historical data, the average time between the last rate hike and the first rate cut in the six Fed rate hiking cycles since 1980 was 6.7 months. Since the Fed has maintained rates for 6 months now, a rate cut in March would be 9 months after the last rate hike. In fact, only one cycle had a longer interval, which was during the rate hiking cycle in June 2004, where policy was unchanged for 15 months. According to market predictions as of January 23, the federal funds futures market indicates that a rate cut will not occur until the FOMC meeting on May 1. In the 7 rate-cutting cycles in the past, the US economy went into a recession in 5 of them. However, in two cycles that started in September 1984 and June 1995, the economy experienced a "soft landing." Considering that the market generally expects the US to avoid a recession, studying these two cycles would be helpful in analyzing the current environment. In both cycles, the Fed ended its rate cuts within 8 months after starting. The average rate cut in these two cycles was 23.5%, which would bring the current 5.5% rate to 4.2%, totaling 5.2 rate cuts. According to market predictions as of January 23, the federal funds futures market indicates 5.47 rate cuts, similar to the situation during the previous soft landings.