The Federal Reserve is expected to halve the number of interest rate cuts next year to two times, with the chairman saying "we need to be cautious in the future."

December 19, 2024, 10:52 AM GMT+9 (excerpt).

The Federal Reserve Board (FRB) at the Federal Open Market Committee (FOMC) held on the 17th-18th lowered the Federal Fund (FF) interest rate target by 0.25 percentage points to 4.25-4.50%.
At the same time as releasing the interest rate and economic outlook, the number of interest rate cuts in 2025 is expected to be 2, halved from the 4 cuts in the previous forecast in September. There are indications that the pace of interest rate cuts in the future may slow down.
Chairman Powell stated in a post-FOMC press conference that any further interest rate cuts will depend on further progress in inflation suppression, suggesting that Federal Reserve officials are beginning to consider the possibility of significant economic changes under the next Trump administration.
In response to Chairman Powell's repeated insistence on the need for caution going forward, U.S. stocks plunged, U.S. bond yields rose, and the market's expectation of interest rate cuts next year narrowed.
He stated, "We are in a good situation, but from here on, at the new stage, we will need to be cautious about further interest rate cuts."
While pointing out that the inflation rate peaked in 22 and has since improved, it has been noted that it has been 'flat' for the past few months. It was stated that the slowdown in inflation pressure continues to be believed, but Federal Reserve Board staff and officials have at least begun preliminary investigations into the effects of Trump's proposed tariff increases, tax cuts, and stricter immigration policies.