Key Takeaways From Fed Decision to Cut Rate by Half Point.

The Federal Reserve has made the decision to lower the benchmark interest rate by 50 basis points, marking the first rate cut in over four years. The vote was 11 to 1, with Fed Governor Michelle Bowman dissenting in favor of a smaller, quarter-point cut. The "dot plot" of rate projections indicates that the median official expects to lower rates by a percentage point by the end of the year, implying two more quarter-point cuts or one larger, half-point cut. The median rate forecast for 2025 has fallen to 3.4% from 4.1% in June, suggesting four additional quarter-point moves next year. The statement from the Federal Reserve emphasizes their commitment to supporting maximum employment and returning inflation to its 2% goal. They will continue to assess incoming data, the evolving outlook, and the balance of risks when considering further adjustments to rates. The statement also acknowledges that job gains have slowed and inflation remains somewhat elevated, but the committee has gained greater confidence that inflation is moving sustainably toward its goal. [Extracted from the article]