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Here's the Fed's new rate forecast that's moving the markets

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The Federal Reserve on Wednesday projected only one rate cut for the remainder of 2024, down from its March forecast that called for three reductions.

Federal Reserve Bank Chair Jerome Powell announces that interest rates will remain unchanged during a news conference at the bank's William McChesney Martin building on May 01, 2024 in Washington, DC.

The central bank's "terminal rate" for 2024, or the rate at which its benchmark fed funds rate will peak, went up to 5.1%, equivalent to a target range of 5%-5.25%. That means that the Fed is only forecasting one quarter-point rate cut fromThe so-called "dot plot," which indicates how 19 FOMC members, both voters and nonvoters, showed four officials in favor of no cuts this year, while seven members projected one reduction.

For 2025, the central bank anticipated four rate cuts in total or a full percentage point reduction in the benchmark fed funds rate.

 

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