December 18, 2024
The Federal Reserve has observed that economic activity continues to grow at a solid pace, with labour market conditions easing slightly and the unemployment rate rising but remaining low. Inflation is making progress toward the Fed’s 2 percent target, though it remains somewhat elevated. The Fed aims to achieve maximum employment and stable inflation at 2 percent over the long term, balancing the risks to these goals amidst an uncertain economic outlook.
To support these objectives, the Fed has decided to lower the target range for the federal funds rate by 0.25 percentage points to 4.25-4.5 percent. The Fed will carefully evaluate incoming data, the evolving economic outlook, and the balance of risks when considering further adjustments to the rate. Additionally, the Fed will continue to reduce its holdings of Treasury securities, agency debt, and mortgage-backed securities, reaffirming its commitment to maximum employment and stable inflation.
The Fed will monitor a wide range of information, including labour market conditions, inflation pressures, inflation expectations, and financial and international developments, to assess the appropriate stance of monetary policy. The Fed is prepared to adjust its policy stance if new risks threaten its goals, ensuring that its decisions are informed by comprehensive and up-to-date economic data.
Federal Funds Target Rate
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