US Fed Cuts Interest Rates Again – 3rd Time This Year
- The US federal Reserve (Fed) announced on Wednesday, December 13, 2023, a reduction of the benchmark interest rate by 0.25%, bringing the target range to 3.50%-3.75%.
- This marks the third instance this year that the Fed has implemented an easing of monetary policy, signaling a shift in response to economic conditions.
- while a majority of Federal Open Market Committee (FOMC) members anticipate further interest rate cuts in the coming year, meaningful disagreement exists regarding the extent of those cuts.
Federal reserve Cuts Interest Rates by 0.25%
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Updated December 12, 2023, at 00:37:12 UTC
Federal Reserve Eases Monetary Policy
The US federal Reserve (Fed) announced on Wednesday, December 13, 2023, a reduction of the benchmark interest rate by 0.25%, bringing the target range to 3.50%-3.75%. This decision aligns with market expectations, as reported by Reuters and relayed by Agerpres.
This marks the third instance this year that the Fed has implemented an easing of monetary policy, signaling a shift in response to economic conditions.
Divergent Views Within the Fed
while a majority of Federal Open Market Committee (FOMC) members anticipate further interest rate cuts in the coming year, meaningful disagreement exists regarding the extent of those cuts. Some officials strongly oppose any further easing of monetary policy,highlighting concerns about potential inflationary pressures or asset bubbles.
Economic Projections for 2024
Fed officials currently project the unemployment rate to be 4.4% by the end of 2024, consistent with the September 2023 data. The Bureau of Labor Statistics reported the unemployment rate at 3.7% in November 2023, indicating a potential increase in unemployment is anticipated.
Inflation is forecast to reach 2.9% by the end of 2023, decreasing to 2.4% in 2024,a downward revision from the 2.6% forecast in September. The Fed maintains a medium-term inflation target of 2%, as measured by the Personal Consumption Expenditures (PCE) price index.
The US economy is expected to grow by 2.3% in 2024, an upward revision from the previously forecast 1.8%. This revised growth projection suggests a more resilient economic outlook than previously anticipated.
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This article provides data as of December 12, 2023, and is intended for informational purposes only. Economic forecasts are subject to change.
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* expanded Economic Projections: Added more context to the economic projections, including the specific unemployment rate data and the inflation measure used by the Fed (PCE).