WASHINGTON—The Federal Reserve has reduced interest rates for the second time in 2024, chopping its benchmark rate by 25 BPs, the Fed reported.
The cut follows a 50 BP reduction in September, and lowers the federal funds rate to a range of 4.5% to 4.75% from its current 4.75% to 5% level.
In considering additional adjustments to the target range for the federal funds rate, the Fed stated it will carefully assess incoming data, the evolving outlook, and the balance of risks.
“The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2% objective,” the Fed stated in a release.
“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook,” the Fed added. “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
ACU Forecasting Another 25 BP Cut
"The FOMC acted in line with expectations in cutting the federal funds rate by 25 basis points. America’s Credit Unions anticipates another quarter-point rate cut next month," said America's Credit Unions Deputy Chief Economist Curt Long. "In his press conference, Chair Powell dismissed concerns about rising inflation expectations and cited further disinflation in shelter costs that are yet to be incorporated into the government calculations. Regardless of the rate environment, credit unions will continue to work tirelessly to meet the financial needs of their members."