PANews reported on September 19 that the Federal Reserve has lowered the federal funds rate by 50 basis points to 4.75%-5.00%, marking the first rate cut since March 2020.
The Fed has raised rates eleven times consecutively from March 2022 to July 2023, with a total increase of 525 basis points. Over the past year, the Fed has maintained the target range for the federal funds rate between 5.25% and 5.5%, which is its highest level in twenty-three years.
Dot plot projections show that by end of year in December, it's expected that:
- In December of each respective year:
- The federal funds rate will be at around:
- For Year End (YE) Dec '24: ~4.4%
- YE Dec '25: ~3.4%
- YE Dec '26: ~2.9%
- YE Dec '27: ~2.9%
- By June of each respective year:
- The federal funds rate will be at around:
- Jun'24 :~5.1%
- Jun'25 :~4.1%
- Jun'26 :~3.1%
In addition, long-term expectations for the federal fund's interest rates are projected to be approximately at about ~2..9% with an estimate for June being slightly lower at about ~2..8%.