The U.S. Federal Reserve indicated on Wednesday that it plans to cut interest rates by an additional 50 basis points by the end of this year, according to projection materials released following its latest meeting.
The Fed on Wednesday lowered the interest rate by 50 basis points to the range of 4.75% - 5.0%, starting its monetary easing in an aggressive way.
The median projection for the federal funds rate showed 4.4% for 2024, which means the central bank may lower interest rates two more times by 25 basis points each this year.
For 2025, the median projection for the federal funds rate showed 3.4% for 2025, which indicates that the bank may lower interest rates four more times by 25 basis points each next year.
Moreover, the bank also penciled in 50 basis points more rate cuts for 2026, for which the federal funds rate projection is estimated at 2.9%.
The Fed's two-day meetings in the rest of 2024 will conclude on Nov. 7 and Dec. 18.
The central bank, in addition, slightly revised down its 2024 growth forecast for the American economy to 2%, down from 2.1% made in June.
The personal consumption expenditures (PCE) price index was also revised down to 2.3%, from 2.6%, for this year.
Core PCE inflation, the central bank's preferred inflation indicator, was revised down as well to 2.6% for 2024, from the 2.8% forecast made three months ago.
The unemployment rate, on the other hand, is estimated to average 4.4% this year, significantly up from the previous projection of 4% made in June.
