In a widely anticipated move, the Federal Open Market Committee of the Federal Reserve voted to decrease the federal funds rate by a quarter-point on Wednesday. This marks their third consecutive cut, bringing the range to 4.25% to 4.50%. Despite concerns about sticky inflation and a strong economy and job market, this decision was expected.
Additionally, Fed officials have revised their forecasts for unemployment in 2025 and inflation in 2025 to be slightly higher at 2.5%, up from previous projections of 2.1% released in September.
Looking ahead, it is forecasted that there will be half a percentage point worth of rate cuts next year compared to previous expectations for four or five cuts in total by most Fed officials back in September. The committee is still considering further adjustments but has not yet determined when or how much they will make.
The decision comes as progress towards lowering inflation has slowed down recently while other economic indicators such as consumer spending and GDP growth continue to show strength within the US economy.
One member of FOMC did vote against this rate cut – Beth Hammack from Cleveland’s Federal Reserve Bank – preferring instead for borrowing costs remain unchanged.
Accordingly with updated Summary of Economic Projections from central bank data shows that ten out nineteen members expect two rates cuts next year while four anticipate even fewer cuts than that number; only five members are expecting more than two reductions.
This breaking news update confirms Connect CRE’s earlier report on potential changes coming soon regarding interest rates which could impact commercial real estate markets across America going forward into future years ahead.
