Interest Rates in 2024: A Future of Declining Peaks

Over the past decade, the financial world witnessed historically low interest rates. But as we transitioned into the 2020s, notably in 2022 and 2023, interest rates surged to highs that many had not anticipated. As we look ahead, the burning question on everyone’s mind is: What can we expect for interest rates in 2024?

The general consensus among financial experts indicates a somewhat paradoxical scenario. Interest rates in 2024 are expected to remain higher than the lows of the past decade. However, they are likely to descend from their 2022-2023 zeniths, primarily driven by a cooling inflation rate.

The Federal Reserve’s Pivot

A significant driver for the trajectory of interest rates is the actions and strategies of the Federal Reserve. As the inflation rate inches closer to their 2% target, the Federal Reserve is projected to initiate interest rate cuts in 2024. Such a strategy is consistent with the central bank’s dual mandate: to foster economic conditions that achieve both stable prices and maximum sustainable employment.

In line with this anticipation, PNC Financial has projected a 25 basis point federal funds rate reduction in early 2024. This would adjust the rate to a range of 4.75-5.00%, as detailed in Document 2.2. Similarly, Goldman Sachs, another major player in the financial sphere, foresees the commencement of rate cuts in 2024.

Long-term Rates and Mortgage Rates

Beyond the federal funds rate, longer-term rates are also expected to see a shift. Projections for the 10-year Treasury yield suggest a decrease, with rates potentially settling around 4% by the end of 2023 or the beginning of 2024.

This declining trend is also anticipated for mortgage rates. After reaching an average of 6.75% in 2023, the 30-year fixed mortgage rate is forecasted to drop, potentially hitting 4.5% by 2025.


While the future remains uncertain and predictions are based on current data and trends, the consensus in the financial community suggests a nuanced future for interest rates. They are expected to remain elevated compared to the ultra-low rates of the past decade. However, a decline from their recent highs is anticipated as the Federal Reserve shifts its focus from combating inflation to stimulating economic growth. As always, investors, homebuyers, and the general public will need to stay informed and prepared for these evolving economic landscapes.

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