Fed Cuts Rates to 4.25%-4.50%; Projects Only Two Cuts in 2025 Amid Dissent

Dec 18, 2024, 07:03 PM

The Federal Reserve cut its benchmark interest rate by 25 basis points to a target range of 4.25% to 4.50% on Wednesday, marking the third consecutive rate cut. The decision was made with an 11-1 vote, with Cleveland Fed President Beth Hammack dissenting in favor of no rate cut. The Federal Open Market Committee indicated that it now expects only two rate cuts totaling 50 basis points in 2025 and another 50 basis points in 2026, fewer than previously projected. Officials also revised up their end-2025 inflation projection to 2.5% and raised the median long-run federal funds rate to 3.0%.