On January 8, local time, the Fed released the 2024 of its December 17-18 meeting of the Federal Open Market Committee. The minutes showed that the Fed decided to cut the target range for the federal funds rate by 25 basis points, bringing its benchmark funds rate to a range of 4.25-4.5 per cent, the third consecutive cut, the cumulative reduction has reached 1 percentage point. However, committee members forecast a significant slowdown in rate cuts in 2025, with only 75 basis points expected for the full year. Market futures prices suggest policy easing in 2025 may be slightly less than that. Still, there is considerable uncertainty among market participants about the path of the federal funds rate over the next year.
In discussing inflation developments, it was noted that inflation remained high despite a significant slowdown from its peak in 2022. Participants commented that headline inflation had slowed in the 2024 and that some recent monthly price readings had been higher than expected. Still, most say that progress in inflation is still evident across a broad range of core goods and services.