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Fed predicts interest rate cuts by end of 2024

The Federal Reserve plans to lower rates by half a point before year-end, affecting economic policies.

September 18, 2024 at 06:25 PM

The Fed forecasts lowering rates by another half point before the year is out

The Federal Reserve plans interest rate cuts based on new projections.

Fed predicts interest rate cuts before year end

The U.S. Federal Reserve has announced plans to lower interest rates by another half point before the end of 2024. According to the latest projections, 19 members of the Federal Open Market Committee anticipate a benchmark federal funds rate of 4.4% by year-end. The Fed will hold two more policy meetings this year, on November 6-7 and December 17-18, where these decisions will be evaluated. This follows the recent rate cut to a range between 4.75%-5%, marking the first reduction since early in the Covid pandemic. The Fed also forecasts that rates may decline further to 3.4% in 2025 and 2.9% by 2026, indicating ongoing economic adjustments.

Key Takeaways

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The Fed plans to cut rates by half a point by year end.

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Current expected rate is at 4.4% amid ongoing adjustments.

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Future forecasts predict rates may drop to 2.9% by 2026.

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The Fed maintains a measured approach to monetary policy.

"There's nothing in the SEP that suggests the committee is in a rush to get this done."

Jerome Powell emphasizes the Fed's careful, measured approach to rate cuts.

"This process evolves over time."

Powell highlights the gradual nature of monetary policy adjustments.

This forecast highlights the Fed's cautious approach to managing inflation and stimulating economic growth. With an ongoing strategy to gradually lower rates, the central bank seems to prioritize stability over rapid recovery. Comments from Fed Chairman Jerome Powell suggest that the committee is not in a hurry to implement significant changes, reflecting a careful balancing act between economic growth and inflation control. The potential rate cuts could impact both consumers and investors as borrowing costs are affected.

Highlights

The Fed is set to lower interest rates again this year.
A cautious approach defines the Fed's monetary strategy.
Future rate cuts could reshape consumer borrowing costs.
Economic stability remains a top priority for the Fed.

Potential public reaction to rate forecasts

The predicted interest rate cuts may lead to varying opinions among the public and investors, as economic ramifications are closely tied to these changes.

Market reactions to these rate cuts will be closely watched as the economic landscape evolves.

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federal reserve interest rates monetary policy economy economy finance

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