Federal Reserve Announces Initial 2025 Rate Cut, Forecasts Two More
The Federal Reserve has announced its first interest rate cut of 2025, reducing the benchmark rate by 0.25 percentage points. This adjustment brings the rate to a range of 4.00% to 4.25%. The central bank’s latest “dot plot” projections indicate two more rate cuts this year, potentially lowering rates to 3.50%-3.75% by the end of the year.
This decision was made after careful consideration of the current economic climate. Policymakers weighed the signs of a deteriorating labor market against the persistent inflation, which continues to exceed the Fed’s 2% target. The rate cut was highly anticipated by markets, following the conclusion of the two-day Federal Open Market Committee meeting.
Fed Chair Jerome Powell highlighted the central bank’s commitment to maintaining a balance between employment and inflation objectives. This commitment is particularly important as the bank navigates an evolving economic landscape, shaped by changing trade policies and global uncertainties.
Source: Yahoo Finance