The US Federal Reserve has cut its main interest rate buy another quarter percentage point bringing the main interest rate down to 3.5-3.75%. This is the second consecutive cut since October.
Economic growth forecasts have been raised to 1.7% by the end of this year and 2.3% next year, slightly higher than projections. Labour market remains very strong although unemployment reached 4.4% since September and Labour force growth has also declined along with Labour demand. Consumer demand remains strong and growth forecasts for next year are positive mainly due to fiscal support and investment in emerging technologies such as AI.
The inflation rate has slowed down but remains elevated compared to the Fed’s 2% target. The Fed projected to reach its 2% target by the end of the year but it is currently off its mark according to its projections with PCE inflation still hovering at 3% with the latest September projections. Data for inflation due to the government shutdown but this information will revised once again by the end of the year.
You can watch the full press conference here.
Newsroom
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