The Fed Cut rates for the third time in a row, signals only one more cut in 2026
Whaton School of Fictory Proferitus Jeremy Siegel gives Federal Reserve Chailos Jerome Powells Interest-Rate Cutlells and sets the record straight on the Claman Countdown.
The Federal Reserve Government officials cut interest rates for the third straight meeting on Wednesday while signaling there could be one more cut next year as rates move closer to neutral.
The Fed lowered the benchmark Federal funds rate by 25 basis points from 3.5% to 3.5% to 3.75%, and its announcement was in line with forecasts of labor market conditions and inflation, as well as the Outlook Interest rate reduction.
It showed that the median defition of the Federal Funds Rate is in the range of 3.25% to 3.5% – which will indicate one fixed rate next year. In addition, policymakers project just one rate determined in 2027, and the Median at 3% in the 3.25% range.
Inflation remains elevated at around 3%, higher than the Fed’s 4% target and has delayed policymakers from cutting rates earlier this year as tax rates are used to force readings that have recently emerged in recent months. Concerns about a weak labor market have pushed the Fed to cut over the past few months.
The Fed is cutting interest rates for the third straight time amid the labor market, inflation
Federal Reserve Chairman Chrome Powell said monetary policy is at a neutral level that will allow policymakers to wait to see how the economy develops. (Amanda Andrade-Rhoades / Reuters)
The latest Fender DOT structure shows policymakers are including that inflation will slow down gradually towards 2% of the target in the next few years.
They see PCE inflation from 2.9% at the end of 2025 to 2.6% next September and 2.4% at the end of the following year. It is expected to fall to 2.1% by 2027, when it will be in line with the Fed’s target.
The Fed’s Favorite Inflation Gauge shows consumer prices remained elevated in September
Additionally, the plot of dots shows Unemployment rate to slow down over the next few years. IT projects that 2025 will end with an unemployment rate of 4.5%, which could fall to 4.4% the following year and 4.2% in 2027.
During the announcement of the Declaration Conference, the Chairman of the Savings Bank Jerome Powell That means following the latest rate cut, the central bank’s policy is close to neutral.
“The Fed’s monetary policy is now in a broader crisis of its neutral rate, and we are well placed to wait to see what the economy says.
Small businesses led November job losses as price uncertainty
He said the Fed’s 75 cuts late this year put the economy in a position where the labor market could stabilize, and he saw no evidence of any major difficulties.
Powell emphasized that the Fed is “committed to 2% inflation, and we will deliver 2%,” just as we are facing challenges in the labor market and the impact of inflation on money.
He said the Fed has made progress falling prices This year and with tax rates flowing through the economy and inflationary effects next year that the Fed is “well placed to wait and see how that plays out.”
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The Fed chair also reiterated the oft-repeated point that the central monetary policy is not in the pre-setting course, as policymakers will continue to watch incoming economic data and be ready to adjust accordingly.
