U.S. Federal Reserve Chairman Jerome Powell speaks during a press conference after a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., July 31, 2024.
Kevin Mohat | Reuters
The Federal Reserve expected to cut rates by another half point before the end of 2024, and the central bank has two more policy meetings to do so.
The so-called dot plot indicates that 19 FOMC members, both voters and non-voters, see the Fed Funds rate at 4.4% at the end of this year, consistent with a target range of 4.25% to 4.5% . The Fed’s two remaining meetings for this year are scheduled for November 6-7 and December 17-18.
The central bank predicts interest rates will reach 3.4% through 2025, pointing to another full percentage point of rate cuts. Interest rates are expected to fall to 2.9% until 2026, with another half-point cut.
“There is nothing in the SEP (Summary of Economic Projections) that indicates the committee is in a hurry to get this done,” Fed Chairman Jerome Powell said at a news conference. “This process evolves over time.”
The central bank cut the fed funds rate to a range between 4.75% and 5% on Wednesday, the first rate cut since the early days of the Covid pandemic.
Here are the Fed’s latest goals:
“The Committee has grown in confidence that inflation is moving sustainably towards 2 percent and believes that the risks to achieving employment and inflation targets are approximately balanced,” the statement after the meeting said.
Fed officials raised their projected unemployment rate to 4.4% this year, up from the 4% projection at the last update in June.
Meanwhile, they cut the inflation outlook to 2.3% from 2.6% previously. On core inflation, the commission lowered its projection to 2.6%, down 0.2 percentage points from June.
— CNBC’s Jeff Cox contributed reporting.