Fed cuts by a quarter point, indicates fewer reductions ahead
Posted: Dec 18, 2024
- Federal Reserve lowered interest rate by a quarter percentage point to 4.25%-4.5%
- Fed indicates potential for two more rate cuts in 2025
- Fed projects GDP growth of 2.5% for the year, slowing to 1.8% in the future
- Unemployment rate expected at 4.2%
- Inflation estimates raised to 2.4% and 2.8%
- Fed cautious of keeping rates too high
- Fed Chair Powell recalibrating policy given current conditions
- Markets skeptical of Fed's ability to continue cutting rates
- 2-year Treasury yield at 4.215%
- Fed cut benchmark rates by a full percentage point since September, taking unusual step of lowering by a half point
- Markets have seen mortgage rates and Treasury yields rise despite Fed cuts
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