Federal Reserve's official announcements and press releases

Federal Reserve to Implement Third Consecutive 25 Basis Point Rate Cut to 4.25%-4.5% Range

Dec 17, 2024, 03:00 PM

The Federal Reserve is poised to lower its benchmark interest rate by 25 basis points at its final meeting of 2024, scheduled for December 18. This move would mark the third consecutive rate cut, adjusting the federal funds rate to a target range of 4.25%-4.5% from the current 4.5%-4.75%. The decision reflects the Fed's response to recent economic indicators, including robust employment data and inflation readings. The CME FedWatch tool indicates a 99% probability of this cut. Despite the anticipated cut, market expectations for further rate reductions in 2025 have been revised downwards, with Goldman Sachs eliminating a January cut from its forecast and now expecting cuts in March, June, and September. The Fed's updated economic projections and Chair Jerome Powell's subsequent press conference, scheduled for 2 p.m. ET and 2:30 p.m. ET respectively, will be closely watched for indications of the monetary policy trajectory into the new year, especially with the incoming Trump administration set to take office in January 2025. The likelihood of another rate reduction in January appears slim, with markets pricing in only a 15% chance.