U.S. Federal Reserve Chair Jerome Powell speaks during a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., July 31, 2024.
Kevin Mohatt | Reuters
The Federal Reserve projected lowering interest 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 indicated that 19 FOMC members, both voters and nonvoters, see the benchmark fed funds rate at 4.4% by the end of this year, equivalent to a target range of 4.25% to 4.5%. The Fed’s two remaining meetings for the year are scheduled for Nov. 6-7 and Dec.17-18.
Through 2025, the central bank forecasts interest rates landing at 3.4%, indicating another full percentage point in cuts. Through 2026, rates are expected to fall to 2.9% with another half-point reduction.
“There’s nothing in the SEP (Summary of Economic Projections) that suggests the committee is in a rush to get this done,” Fed Chairman Jerome Powell said in a press conference. “This process evolves over time.”
The central bank lowered the federal funds rate to a range between 4.75%-5% on Wednesday, its first rate cut since the early days of the Covid pandemic.
Here are the Fed’s latest targets:
“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the post-meeting statement said.
The Fed officials hiked their expected unemployment rate this year to 4.4%, from the 4% projection at the last update in June.
Meanwhile, they lowered the inflation outlook to 2.3% from 2.6% previous. On core inflation, the committee took down its projection to 2.6%, a 0.2 percentage point reduction from June.
— CNBC’s Jeff Cox contributed reporting.