Federal Reserve Meeting, Fed Rate Cut 2024: The Federal Reserve maintained its primary interest rate for the third consecutive occasion, while also laying the groundwork for several anticipated cuts in 2024 and the subsequent years.
Federal Reserve maintained the funds rate at its 22-year peak of 5.25%-5.5% for the third consecutive meeting. However, in the “dot plot” projections, the Fed signaled a possibility of three quarter-percentage-point cuts in 2024. Among the officials, eight expect fewer than three quarter-point cuts next year, while five anticipate more.
According to the committee’s “dot plot” reflecting individual members’ projections, there are expectations for an additional four cuts in 2025, totaling a full percentage point reduction. In 2026, three more reductions are anticipated, potentially bringing the fed funds rate to a range of 2% to 2.25%, approaching the long-run outlook. However, there is notable variation in the estimates for the final two years.
During the news conference, Powell stated, “Recent indicators indicate a significant slowdown in the growth of economic activity from the exceptional pace observed in the third quarter. Nevertheless, GDP is expected to increase by approximately 2.5% for the entire year.”
He said “In general, the labor market has shown highly favorable trends. It has been an opportune period for individuals to secure employment and experience substantial wage growth,” remarked Federal Reserve Chair Jerome Powell during a press conference on Wednesday.
Federal Reserve in its FOMC statement said ”In determining the extent of any additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Read Here Full Statement by Federal Reserve on Monetary Policy
In the press briefing, Powell noted, “Recent indicators point to a notable deceleration in the growth of economic activity compared to the remarkable pace observed in the third quarter. Nonetheless, GDP is projected to rise by approximately 2.5% for the entire year.”
