The highly anticipated day has arrived, with the Federal Reserve set to announce its decision on interest rates today. Investors will be closely watching the dot plot data to see if the market's expectations of three rate cuts in 2024 will hold true. Schwab Asset Management CEO and CIO Omar Aguilar joins Yahoo Finance Live to discuss US recession forecasts on this anticipation.

Aguilar notes that the high levels of inflation the Fed is trying to reduce require "a very different path." He highlights that with sticky inflation data still emerging, the Fed is grappling with whether "we need to be more patient," keeping rates higher for longer or lowering rates and risking a recession.

However, Aguilar emphasizes that the economy currently remains resilient.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

BRAD SMITH: You know, Omar, as you put within your notes to us as well here, historically, central banks they don't have a tendency to cut rates ahead of economic deceleration here. So why is the case different this time, potentially?

OMAR AGUILAR: Well, you know, the-- the historical high levels of inflation that the Fed has been, you know, looking to reduce is certainly a very different path of what we had. And a lot of that obviously is related to the pandemic we had in 2020 and the supply chain disruptions that we had. So I think the-- the big trade-offs that the Fed is and other central banks are trying to do is-- You know, is the sticky inflation so hard, and therefore we need to be more patient and try to keep these high levels of rates for a little longer? Or do we think that there is a risk that we're going to push the economy into recession?

So far, you know, the economy seems to be incredibly resilient, and a lot of the inflation data seems to point out that it's all coming from the services sector. Now when that-- what that means is that that supply chain disruption that we saw back in 2020 and in 2021, you know, has completely gone away, and therefore what is left is that service section inflation that the Fed continues to, you know, be restrictive about. Now what is-- what is-- the big trade-off is whether or not that real Fed fund rates that is very high right now is something that potentially have an impact on GDP growth.