The Federal Reserve will announce an interest-rate decision and release new economic projections on Wednesday.
By: Ajay
Date: 18/09/2024
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Since July 2023, interest rates have been held between 5.25% and 5.5% after rapid increases to combat inflation.
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Policymakers are expected to cut rates by a quarter or half a percentage point, marking the first reduction in over four years.
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Investors are watching for how the Fed’s projections may indicate future policy changes.
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The "dot plot" shows each Fed official's interest rate estimate for the coming years, focusing on the median dot as the most likely forecast.
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The Fed’s rate hikes from March 2022 to July 2023 aimed to cool the economy by making borrowing more expensive.
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Higher rates have slowed the housing and labor markets, helping to curb inflation.
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The Fed aims to avoid causing a recession by not over-tightening, hence moving toward rate cuts.
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Other central banks, like those in Europe and Canada, have already begun cutting interest rates.
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In 2024, the Fed initially expected several rate cuts, but stubborn inflation limited projections to just one cut in June, though inflation has recently cooled.
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