Federal Reserve Chairman Powell speaks at a press conference after the two-day Federal Open Market Committee interest rate policy meeting in Washington, the United States, on July 31, 2024.
Kevin Mohart | Reuters
The Federal Reserve expects to lower interest rates by another half percentage point by the end of 2024, and the central bank has two more policy meetings to achieve this goal.
The so-called dot plot shows that 19 FOMC members, including voters and non-voters, expect the benchmark federal funds rate to end the year at 4.4%, equivalent to a target range of 4.25% to 4.5%. The Fed’s remaining two meetings this year are scheduled for November 6-7 and December 17-18.
By 2025, the central bank predicts that interest rates will fall to 3.4%, which means the rate cut will be another one percentage point. By 2026, interest rates are expected to fall to 2.9% and drop another half percentage point.
“There is nothing in the SEP (Summary of Economic Projections) to indicate that the committee is rushing to complete this work,” Fed Chairman Powell said at a news conference. “This process evolves over time.”
central bank Lower the federal funds rate to a range of 4.75%-5% On Wednesday, it was the first rate cut since the early days of the coronavirus pandemic.
Here are the Fed’s latest goals:
“The Committee has increased confidence that inflation will continue to move toward 2 percent and judges that risks to achieving the employment and inflation objectives are broadly balanced.” The statement after the meeting said.
Fed officials raised their expected unemployment rate this year to 4.4% from the 4% forecast in their last update in June.
At the same time, they lowered their inflation outlook to 2.3% from 2.6% previously. On core inflation, the committee lowered its forecast to 2.6%, down 0.2 percentage points from June.
—CNBC’s Jeff Cox contributed reporting.
