The Federal Reserve announced a 25 basis point interest rate cut, lowering the target range to 3.50%-3.75%, marking the third consecutive rate cut. The decision was passed with a 9-3 vote, with 2 members supporting keeping rates unchanged and 1 member advocating for a 50 basis point cut (the largest divergence in nearly 6 years). The Fed also decided to purchase $40 billion in Treasury bills over 30 days starting December 12 to maintain ample reserve supply.
The policy statement removed the description of unemployment as "low," replacing it with "the unemployment rate has risen slightly as of September." The economic outlook raised GDP growth expectations for this year and the next three years while slightly lowering inflation expectations for this and next year and the unemployment rate expectation for the following year.As with the last meeting, Fed officials currently expect one more 25 basis point rate cut next year and the year after, following this year's three cuts.
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