What to Watch as the Fed Makes Its Final 2024 Rate Decision

Published On Dec 18, 2024, 5:04 AM

The Federal Reserve is expected to cut interest rates for the third time in 2024 during a meeting scheduled for December 18. Investors are particularly focused on insights regarding future monetary policy, especially for 2025, in light of continuing inflation and strong economic growth. The Fed will issue new economic projections and a 'dot plot' outlining officials' expectations for future rate adjustments. Currently, rates are at about 4.6%, expected to close at approximately 4.4% after the meeting.

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The anticipated interest rate cut may provide a short-term boost to financial markets, particularly for sectors that benefit from lower borrowing costs. However, given that the Fed may reduce the number of expected rate cuts for 2025, there could be a mixed longer-term outlook as investors calibrate for future economic conditions.

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