In a strategic move initially set in motion with a substantial half-point reduction in September, the Federal Reserve announced on Thursday its anticipated decision to further cut interest rates by an additional quarter of a percentage point. The revised target range for the federal funds rate now stands at 4.50 to 4.75 percent.
This decision aligns with the Fed's objective of responding to more tempered labor market conditions and the ongoing trajectory towards its inflation target of 2 percent. However, the central bank acknowledged that the potential risks to achieving its dual mandate—maximum employment and stable inflation at the 2 percent threshold—remain balanced.
"The economic outlook remains uncertain, and the Committee remains vigilant regarding the risks to its dual mandate," the Fed stated.
Looking ahead, the Federal Reserve emphasized its commitment to monitoring incoming data and evaluating the evolving economic landscape and associated risks to guide future rate adjustments.
The Fed's next policy meeting is slated for December 17-18, with current projections from the CME Group's FedWatch Tool indicating a 70 percent probability of an additional quarter-point rate cut, while a 29 percent probability remains for maintaining the status quo.
