The Federal Open Market Committee (FOMC) is set to consider lowering interest rates again, with a majority of experts predicting a cut between 4.25% and 4.5%. This would mark the FOMC’s third rate cut in as many months, following September and November reductions. The decision comes amid subdued inflation and softening job market trends.
Recent Fed Governor speeches have signaled that policymakers are leaning towards looser monetary policy, despite concerns about inflation potentially exceeding the 2% target. Fed Governors Christopher Waller and Andrea Kugler have expressed optimism about disinflation, citing the economy’s progress in moving towards maximum employment and price stability goals.
The FOMC has previously cut rates to remove restrictive policies after high inflation rates in 2022. With inflation now significantly lower, officials have indicated a desire to ease monetary policy further. While questions remain about the trajectory of rate cuts in 2025, the risks associated with high inflation data or an abruptly weakening job market appear relatively low.
A prediction site, Kalshi, currently gives a 73% chance of a rate cut on December 18. The FOMC will review additional economic data before making its decision, including jobs and inflation reports.
Source: https://www.forbes.com/sites/simonmoore/2024/12/03/fed-leans-toward-a-december-interest-rate-cut