Earlier today, the Federal Reserve announced a half-point reduction in the benchmark rate, lowering it from a two-decade high range of 5.25%-5.50% to 4.75%-5.00%. Chair Jerome Powell emphasized that future rate decisions will be data dependent. The CME FedWatch Tool indicates expectations for further cuts in the upcoming November and December meetings, with variations in the projected amounts. According to the Federal Reserve's projection summary, the median terminal rate is expected to be 4.4% by the end of 2024, which is to be achieved by two more quarter point cuts, with the target rate by the end of 2025 being 3.4%. The totality of cuts forecasted, however, has been fairly consistent throughout the year, except that the Fed now sees the necessity to front-load.
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