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FOMC Cuts Rates 25 Basis Points
The Federal Open Market Committee lowered the target Federal Funds rate by 25 basis points, to a target of 4.5%-4.75%, citing the progress in inflation and slowing job gains on Thursday.
"Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low," the FOMC statement said. "Inflation has made progress toward the Committee's 2 percent objective but remains somewhat elevated."
What Has Changed in the New Fed Statement
Here is a detailed comparison of the Fed's current and previous statements, providing enlightening information for your investment choices.
The last time the committee met on September 18, they unanimously voted to lower rates by 50 basis points, starting an aggressive rate reduction policy after they decided the economy was on track. In the lead-up to the U.S. Presidential election, the FOMC's direction of monetary policy looked more uncertain given the unknown effects of either presidential candidate's economic policy goals, and political appointment plans.
The Fed's dot plot graph forecast the median key interest rate ending 2024 at 4.4%, before declining to 3.4% by the close of next year. At the last meeting, nine officials said they should cut rates again this year, and ten said just one more cut would do the trick.
For the target range to meet the 4.4% rate, the Fed would have to cut twice at 25 bps to a range of 4.25-4.5 or a cut of 50 bps or a similar combination of cuts.
In September, the unemployment rate had climbed to 4.3% in July from 3.7% in January. Since then, the most recent unemployment data showed a slight slowdown- numbers released on November 1st showed the rate lowered to 4.1%. PCE inflation, meanwhile, came on October 30th at 2.1% year over year, the lowest since 2021. While Core PCE was still higher at 2.7%, the numbers looked on track for a definite slowdown in prices.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Kevin Travers
Moomoo News and Community Manager
Moo moo News and Community Manager, NJ Office.
Fmr CNBC contributor, reporter/investor/trader
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SPACELIGHT : Expected.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
jobless jack : as expected. Hope this will revive economy
ZnWC : Thanks for the summary![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
YOHO3318 : Thanks for the comparison of the FED statements. The latest statement sounds like the FED is less confident that the inflation will move towards the target 2%. Will we still have another 25bps rate cut by year end?![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
73372627 jobless jack : No. This cuts come in answer to the elections. To be honest, is need improvment in the last moment for Dems to unemployment, inflation and the more it is the energy sector. Tech sector it is OK, but rest???. There are manny factors to revitalised. Cuts rates in general will not be reflected before 3 months. It is a good way and path but not overnight.
73372627 : Thanks Kevin for this clear input.
DimondHandsDsolo94 YOHO3318 : this stock should be soring right now
Kevin Travers OP YOHO3318 : I saw they took out the word confident, but I saw some bloomberg reporter (maybe some analyst on twitter) had said that part of the statement was there to make way for 50 bps cut last time, and to “start” the cutting cycle. Now they are in the cutting cycle and dont need to spell it out as directly. Dont watch the mouth, watch the hands, they projected 1-2 cuts by the end of the year remember![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")