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FOMC meeting highlights

held on September 17–18, 2024

The FOMC meeting resulting in the Fed reduced the federal funds rate by 50 basis points to 4.75%-5.00%, signaling the start of a rate-cutting cycle. This decision reflects increased confidence in achieving the 2% inflation target. GDP growth projections for 2024-2026 remain around 2%, while unemployment is expected to peak at 4.4%. Core inflation forecasts for 2024 and 2025 were lowered, supporting the Fed’s efforts toward a soft landing.

GDP Growth:

  • 2024: Revised upwards from 1.9% (June) to 2.0%.

  • 2025: Unchanged at 1.8%.

  • 2026: Remains at 1.8%.

Inflation (PCE):

  • 2024: Increased from 2.2% (June) to 2.3%.

  • 2025: Unchanged at 2.1%.

  • 2026: Still expected to be 2.0%.

Federal Funds Rate:

  • 2024: Increased from 4.6% (June) to 4.4%.

  • 2025: Lowered from 3.4% to 3.6%.

  • 2026: Raised slightly from 2.9% to 3.0%.

These updates show a slight shift towards stronger growth and higher inflation expectations, with minor adjustments to the federal funds rate.

Full Details: ttps://www.federalreserve.gov/monetarypolicy/fomcprojtabl20240918.htm