After two years of aggressively raising interest rates and then keeping them elevated, the Federal Reserve is poised to begin cutting rates. These lower rates will spur businesses to invest in equipment, software and intellectual property, as well as prompt consumers to refinance their mortgages.

In the September issue of The Real Economy, RSM Chief Economist Joseph Brusuelas looks at the market forces driving the Fed’s coming policy pivot and explains why the economy is not about to tip into a recession.

Among Brusuelas’s forecasts:

• The economy will grow at a 1.8% rate in the second half of the year.
• Hiring will slow to near 120,000 per month in the final months of the year.
• The Fed will cut its policy rate until it reaches somewhere between 3% and 3.5%.

Also in this issue, Brusuelas looks at inflation expectations, as seen in Treasury inflation-protected securities. In August, the 10-year TIPS were projecting an inflation rate of 2.1%, which is just about at the Fed’s target of 2%. It all adds up to a new rates regime for the Federal Reserve.

We look at these topics and more in this issue of The Real Economy.