The Federal Reserve lowered its benchmark interest rate by 25 basis points to the 4.25%-4.50% range, marking its third consecutive easing move this year. The Fed's 'dot plot' projects a lower rate of 3.9% by year-end 2025, indicating fewer rate cuts than previously anticipated. This move comes as the Fed weighs the impact of continued economic growth and inflation.
The Federal Reserve has cut its benchmark fed funds rate by 25 basis points to the 4.25%-4.50% range.
The Fed's quarterly economic projections — which include the "dot plot" indicating where the central bank expects the Fed funds rate to land over time — reveal that policymakers expect the Fed funds rate to decline to 3.9% by year-end 2025 or another 50 basis points in rate cuts next year. That's higher than the 3.4% projected in September, signaling a less dovish monetary policy in 2025.
“I think the biggest headache for the Fed right now is the fact that financial conditions have still tightened despite the Fed cutting rates," Andre Dragosch, European Head of Research at Bitwise, told CoinDesk prior to today's action. "Long bond yields and mortgage rates have increased since September and the dollar has appreciated which also implies a tightening in financial conditions.
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