FOMC cut policy rates by 50 bp
- target range is now 4.75-5.00%
- 2024 dot down to 4.4%, indicating another 50 bp by year-end (it was line ball, the difference between year end 25bp and 50bp was only one dot) ... expectations are currently 25 bp in November and 25 bp in December.
- longer-run dot was revised higher to 2.9%
- dot plot shows 2026 and 2027 both at 2.9%
- left QT in place
Economic forecasts
- GDP was revised to 2.0% for 2024-2027
- Unemployment Rate revised higher to 4.4% in 2024 and 2025
- Unemployment Rate seen to 4.3% in 2026, and 4.2% in 2027
- Core-PCE in 2024 moved to 2.6% (vs. 2.8% prior), 2025 2.2% (vs. 2.3%), 2026 unchanged at 2.0%
One dissent (first from a Fed Governor in 19 years)
- Bowman dissented in favour of a 25 bp cut
More:
Chair Powell preparing for a BIG cut?