Schroders global investment report states that due to the widespread expectation of a forthcoming interest rate cut in the United States financial markets, many investors have already "buckled their seat belts". However, the persistently high wage levels could lead to the cautious Federal Open Market Committee (FOMC) maintaining a wait-and-see attitude until the end of 2024. Schroders global investment expects the Federal Reserve to cut interest rates for the first time in June 2024, followed by rate cuts at every meeting by the end of the year. However, as the new year approaches, the bank believes that economic data will reflect that decision-makers do not need to restrict interest rates. The bank expects the Federal Reserve to cut rates at each meeting and return rates to a neutral level. Based on the actual neutral interest rates between 1.25% and 1.5%, the bank estimates rates will recover to around 3.5%. Schroders global investment notes that despite the tightening of interest rates, the US economy is showing strong resilience, with a projected GDP growth of 2.5% and an average monthly non-farm employment increase of 225,000. However, the core Consumer Price Index (CPI) has decreased from 5.7% to 3.9%, with an even larger drop in inflation rates after excluding the housing category, which accounts for 40% of the index. According to this narrow core CPI calculation, prices are only 2.2% higher than a year ago. Housing inflation seems to be falling due to the impact of declining rent, and core commodity prices remain stable or even decline despite recent disruptions in the shipping industry. However, it remains uncertain whether the super-core CPI (i.e., excluding housing core services inflation) will slow down, as this index reflects domestic price pressures most accurately, affecting the Federal Reserve's interest rate decisions in 2024. The trend of super-core inflation in 2024 will largely depend on the labor market, as labor costs are the biggest cost for most service providers. It is worth mentioning that there has been significant progress in labor market rebalancing post-pandemic. Hiring intentions are gradually increasing, and immigrant populations are filling the labor gap left by early retirees. Additionally, the number of resignations has decreased, reflecting lower employee turnover rates and reduced competition. While this typically leads to a slowdown in wage growth, it is not absolute, especially in the backdrop of the 2024 US election year, where it is almost certain that Biden and Trump will once again vie for the presidency. Normally, in uncertain environments, businesses may forego investments, so even with two drastically different election results, labor demand may remain high. Conversely, businesses may use the flexibility provided by the labor market to respond to demand fluctuations. As a result, wage growth is expected to remain stable, with productivity potentially weakening. This could ultimately lead to increased labor costs for businesses, further putting pressure on super-core inflation. While investors see an 80% probability of an interest rate cut in March 2024, this may be premature as the FOMC chooses to take a cautious approach, and there is still a risk of rising inflation. However, the rate cut may not come too late. With the expectation of a slowdown in economic growth in 2024 and gradual normalization of the labor market, the current policy stance is becoming overly tight, especially in the actual conditions of slowing inflation. Furthermore, as the lagged effects of policy actions on the US economy seem to be prolonged, the FOMC is unlikely to wait for complete confirmation of controlled inflation before taking further action.