The Federal Open Market Committee kept the target Federal Funds Rate unchanged at 4.25%-4.5% Wednesday. The Committee's forward-looking projections showed an expected 50 basis points worth of cuts in 2025. The projection was mostly the same as December's quarterly projection, but the forward-looking unemployment rate, PCE Core, and PCE inflation figures were higher, while the annualized GDP projection was lower.
The dot plot shows how economic policy forecasts change every quarter. In September last year, the committee predicted an average of 4 cuts in 2025 to bring the target rate to a target of 3.25 by the end of the year. The FOMC also started their cutting regime at that meeting, with a large 50 basis point cut- from 5.50 to 5/4.75.
In December, inflation looked a little more sticky even after a November 25 bp rate cut, and the Committee showed future rate dots around a higher average target, with a 3.75 target rate by the end of 2025 and only about two more cuts. They also cut the target rate by another 25 basis points, landing at a 4.5 target rate.
The projections recorded slight but major differences: higher inflation and unemployment and lower GDP growth for 2025 than projected in December.
Here is a moomoo collection of the entire FOMC statement and what changed this time:
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Comment(1)
Nicely screwed!!!
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