Three Dissents in FOMC Cutting Interest Rates 25bps, "QE is Back"

Core Viewpoint - The Federal Reserve is expected to implement a $40 billion purchase of Treasury bills, indicating a shift towards quantitative easing (QE) after halting quantitative tightening (QT) in December 2022, which may positively impact the housing market and overall economic activity [6][8]. Interest Rate Decisions - Three dissenters voted against the majority, with Steven Myron advocating for a 50 basis point cut, while others, including Austin Goulsby and Jeffrey Schmidt, voted for no cuts, reflecting concerns about persistent inflation [1][2][5]. - The majority of the committee, consisting of nine members, supported a 25 basis point cut, indicating a divided stance on the economic outlook [6]. Economic Projections - The median GDP projections are set at 1.7% for 2025 and 2.3% for 2026, suggesting a gradual improvement in economic activity [10]. - Unemployment projections are expected to decrease to 4.5% in 2025 and 4.4% in 2026, indicating a positive trend in the labor market [10]. Market Reactions - The stock market showed a slight rally, with E-Minis up about 10 points, reflecting investor optimism despite the mixed signals regarding interest rate cuts [9]. - The overall economic indicators suggest moderate expansion, which may lead to a delay in any rate cuts, pushing expectations from March to April [11][14].