{"id":2020,"date":"2024-12-19T12:57:45","date_gmt":"2024-12-19T12:57:45","guid":{"rendered":"https:\/\/otetmarkets.com\/blog\/?p=2020"},"modified":"2024-12-19T12:57:45","modified_gmt":"2024-12-19T12:57:45","slug":"fed-cuts-interest-rates-again-signals-slower-pace-in-2025","status":"publish","type":"post","link":"https:\/\/otetmarkets.com\/blog\/news\/fed-cuts-interest-rates-again-signals-slower-pace-in-2025\/","title":{"rendered":"Fed Cuts Interest Rates Again, Signals Slower Pace in 2025"},"content":{"rendered":"\n<p>The Federal Reserve announced a 25 basis point reduction in the federal funds rate in December 2024, marking the third consecutive rate cut this year. The new range for borrowing costs stands at 4.25%-4.5%, which aligns with market expectations. This decision signals the Fed&#8217;s continued efforts to support economic growth, though it also suggests that future rate cuts may be more gradual than initially projected.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"481\" src=\"https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2024\/12\/photo_5989962056624883219_y-1024x481.jpg\" alt=\"\" class=\"wp-image-2021\" srcset=\"https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2024\/12\/photo_5989962056624883219_y-1024x481.jpg 1024w, https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2024\/12\/photo_5989962056624883219_y-300x141.jpg 300w, https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2024\/12\/photo_5989962056624883219_y-768x361.jpg 768w, https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2024\/12\/photo_5989962056624883219_y.jpg 1280w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-revised-economic-forecasts-for-2024-2026\"><strong>Revised Economic Forecasts for 2024-2026<\/strong><\/h2>\n\n\n\n<p>The Fed&#8217;s updated economic projections show a more optimistic outlook for the economy. GDP growth forecasts for 2024 have been raised to 2.5%, up from the previous 2%, with an upward revision for 2025 to 2.1% from 2%. The growth rate for 2026 remains unchanged at 2%. In addition, the Fed adjusted its inflation projections for both PCE and core PCE. The inflation forecast for 2024 has been increased to 2.4% (from 2.3%), while projections for 2025 and 2026 have also been revised higher, signaling expectations for persistent inflationary pressures in the near term.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-lower-unemployment-outlook\"><strong>Lower Unemployment Outlook<\/strong><\/h3>\n\n\n\n<p>The Fed&#8217;s revised forecasts also indicate a more favorable unemployment outlook. The unemployment rate for 2024 is now projected to be 4.2%, down from the earlier forecast of 4.4%. The forecast for 2025 has also been lowered to 4.3% from 4.4%, while the unemployment rate for 2026 is expected to remain steady at 4.3%. This lower unemployment projection reflects the Fed&#8217;s confidence in the resilience of the labor market despite ongoing economic challenges.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-future-rate-cuts-to-slow\"><strong>Future Rate Cuts to Slow<\/strong><\/h3>\n\n\n\n<p>Looking ahead to 2025, the Fed&#8217;s &#8220;dot plot&#8221; suggests that policymakers now expect only two additional rate cuts totaling 50 basis points, a significant reduction from the full 1% of cuts projected in the previous quarter. This shift in expectations indicates that while the Fed is committed to supporting economic growth, it is adopting a more cautious stance on rate reductions in the coming years.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Federal Reserve announced a 25 basis point reduction in the federal funds rate in December 2024, marking the third consecutive rate cut this year. The new range for borrowing costs stands at 4.25%-4.5%, which aligns with market expectations. This decision signals the Fed&#8217;s continued efforts to support economic growth, though it also suggests that [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2023,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,2],"tags":[37],"class_list":["post-2020","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-economy-news","category-news","tag-financialnews"],"_links":{"self":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/2020","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/comments?post=2020"}],"version-history":[{"count":1,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/2020\/revisions"}],"predecessor-version":[{"id":2024,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/2020\/revisions\/2024"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/media\/2023"}],"wp:attachment":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/media?parent=2020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=2020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=2020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}