Fed Turns Hawkish, Signals Fewer 2025 Cuts: What This Means for Banks

The Federal Reserve announced yet another interest rate cut of 25 basis points yesterday despite persistent inflation. This lowered the Fed funds rates to the 4.25-4.5% range, which is now at the same level as in December 2022. Further, the central bank scaled back the number of cuts it projects for 2025, signaling caution. The “dot plot,” which maps out policymakers' expectations for where interest rates could be headed in the future, showed only two interest rate cuts for 2025. This is lower than the four ...