The Fed forecasts lowering rates by another half point before the year is out

cnbc.com:

The Federal Reserve projected lowering interest rates by another half point before the end of 2024, and the central bank has two more policy meetings to do so.

The so-called dot plot indicated that 19 FOMC members, both voters and nonvoters, see the benchmark fed funds rate at 4.4% by the end of this year, equivalent to a target range of 4.25% to 4.5%. The Fed's two remaining meetings for the year are scheduled for Nov. 6-7 and Dec.17-18.

Through 2025, the central bank forecasts interest rates landing at 3.4%, indicating another full percentage point in cuts. Through 2026, rates are expected to fall to 2.9% with another half-point reduction.

«There's nothing in the SEP (Summary of Economic Projections) that suggests the committee is in a rush to get this done,» Fed Chairman Jerome Powell said in a news conference. «This process evolves over time.»

The central bank lowered the federal funds rate to a range between 4.75%-5% on Wednesday, its first rate cut since the early days of the Covid pandemic.

Here are the Fed's latest targets:

«The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,» the post-meeting statement said.

The Fed officials hiked their expected unemployment rate this year to 4.4%, from the 4% projection at the last update in June.

Meanwhile, they lowered the inflation outlook to 2.3% from 2.6% previously. On core inflation, the committee took down its projection to 2.6%, a 0.2 percentage point reduction from June.

— CNBC's Jeff Cox contributed reporting.