In support of our goals in light of the balance of risks to employment and inflation. Today, the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. As a separate matter, we also decided to initiate purchases of shorter term Treasury securities solely for the purpose of maintaining an ample supply of reserves over time, thus supporting effective control of our policy rate.Inflation has eased significantly from its highs in mid 2022, but remains somewhat ele ...

Core Viewpoint - The Federal Open Market Committee has decided to lower the policy interest rate by a quarter percentage point to support employment and inflation goals, while also initiating purchases of shorter-term Treasury securities to maintain an ample supply of reserves [2] Economic Activity - Economic activity is expanding at a moderate pace, with solid consumer spending and continued growth in business fixed investment [3] - The housing sector remains weak, and the temporary federal government shutdown has negatively impacted economic activity, though growth is expected to rebound next quarter [4] Labor Market - Despite delays in official employment data, evidence indicates low levels of layoffs and hiring, with perceptions of job availability declining [5] - The unemployment rate has edged up to 4.4%, with job gains slowing significantly, attributed to a decline in labor force growth due to lower immigration and participation [5][6] - The median projection for the unemployment rate is 4.5% at the end of this year, with a slight decrease expected thereafter [6] Inflation - Inflation has eased from mid-2022 highs but remains elevated, with total PCE prices rising 2.8% over the 12 months ending in September [7] - Core PCE prices also rose 2.8%, with inflation for goods increasing due to tariffs, while disinflation in services continues [8] - The median projection for total PCE inflation is 2.9% this year and 2.4% next year, with a long-term goal of 2% [9]

Economic Outlook - The economy is expanding at a moderate pace, with solid consumer spending and business fixed investment [3] - The temporary government shutdown likely weighed on economic activity in the current quarter, but these effects should be mostly offset by higher growth next quarter [4] - Real GDP is projected to rise 17% this year and 23% next year, somewhat stronger than projected in September [4] Labor Market - Labor market conditions appear to be gradually cooling [1] - Layoffs and hiring remain low, and perceptions of job availability and hiring difficulty have declined [5] - The unemployment rate reached 44% in September, and job gains have slowed significantly [5] - The median projection of the unemployment rate is 45% at the end of this year and edges down thereafter [6] Inflation - Inflation has eased significantly from its highs in mid-2022, but remains somewhat elevated relative to the 2% longerrun goal [7] - Total PCE prices rose 28% over the 12 months ending in September, and core PCE prices also rose 28% [7] - Near-term measures of inflation expectations have declined from their peaks earlier in the year [8] - The median projection for total PCE inflation is 29% this year and 24% next year, a bit lower than the median projection in September, thereafter, the median falls to 2% [9] Monetary Policy - The Federal Open Market Committee decided to lower the policy interest rate by a quarter percentage point (025%) [2] - The Committee also decided to initiate purchases of shorterterm Treasury securities solely for the purpose of maintaining an ample supply of reserves [2]

Economic Outlook - Some officials view the economy as cooling in a controlled manner, while others express concern that deterioration could accelerate if borrowing costs remain high for an extended period [1] - Hiring has slowed and wage growth has decelerated, yet unemployment remains low by historical standards [1] Federal Reserve Actions - The Federal Open Market Committee (FOMC) lowered the interest rate by a quarter percentage point in both September and October due to labor market concerns, maintaining a cautious "wait-and-see" approach influenced by tariff inflation and trade policy [2] - The FOMC signaled a potential pause in rate cuts in the short term, with the Federal Funds Rate now set between 3.50% and 3.75% following a 25-percentage-point cut in December [5][6] - The Fed plans to buy $40 billion of Treasury bills monthly starting December 12 to ensure sufficient cash in the financial system, marking a shift from previous balance sheet reduction strategies [13][15] Inflation and Employment - The Fed's dual mandate requires balancing inflation and job growth, with current inflation levels deemed too high and the labor market showing signs of softening [9][10] - Powell indicated that the Fed has done enough to support employment while keeping rates high enough to manage price pressures [7] Future Projections - The quarterly Summary of Economic Projections suggests one more quarter-point rate reduction is expected in 2026, with growth upgraded to 2.3% primarily due to adjustments from the government shutdown [4][19] - The "dot plot" will be closely monitored for insights into the Fed's future rate strategy, with a small number of projected cuts indicating caution among policymakers [17][18]

Just seconds ago, the Federal Reserve decided to cut interest rates for a third straight time. The board voting for a quarter point rate cut. That is what experts were predicting and it is the final interest rate decision of 2025.Let's zoom out and look at the Fed's decision o decisions over this year. We've seen cuts since September after the interest rate did not change for most of the year. It's also worth noting the board members were flying blind a bit before casting today's vote.That's because the gov ...

The Federal Reserve reducing interest rates by an expected quarter point to a new range of 3.5% to 3.75%. There were three descents, the first time that's happened since September 2019. Two were against the cut, including Chicago Fed President Austin Goulby along with um Kansas City Fed President Jeff Smith.His second descent in a row. Also another disscent for a 50 basis point cut from new Fed governor on loan from the administration Steven Myron. To recap, the vote was nine for cutting a quarter, two agai ...

Core Viewpoint - Anthony Scaramucci predicts a 70% chance that the Supreme Court will rule to eliminate President Trump's tariffs, arguing they are unauthorized taxes imposed without congressional approval [2][3]. Group 1: Tariff Authority and Legal Challenges - Scaramucci asserts that Trump's imposition of tariffs without congressional approval constitutes an unauthorized tax, emphasizing that taxation in the U.S. requires representation [2][3]. - He suggests that if the Supreme Court rules in favor of Congress, companies expecting to pay 10-15% in tariffs might not have to pay them, potentially leading to a significant liquidity push in the markets next year [3][4]. - Scaramucci notes that the Supreme Court may not order refunds and could allow the tariff revenues to be retained, indicating previous losses in lower courts for Trump [4]. Group 2: Economic Implications and Policy Divide - Scaramucci has criticized Trump's trade and tariff policies, linking them to rising inflation and a slowdown in business and consumer demand [5]. - U.S. Treasury Secretary Scott Bessent expresses confidence in maintaining tariff policies, citing sections of the 1962 Trade Act that grant the president significant authority over import duties [6]. - A recent analysis from Oxford Economics outlines four potential tariff paths for the upcoming year, each with significant implications for inflation, employment, and financial markets, highlighting the ongoing importance of trade policy as an economic force [7].

Core Viewpoint - The Federal Reserve's recent 25-basis-point rate cut signals ongoing efforts to support credit conditions as inflation trends toward a more acceptable level, with mortgage rates expected to gradually decline as a result [1][11]. Mortgage Rate Trends - The average 30-year fixed mortgage rate is currently between 6.19% and 6.30%, down from over 7% earlier in the year, while the average 30-year refinance rate is around 6.52% [3][9]. - Historical patterns indicate that mortgage rates typically ease following Fed cuts, although the timing can vary based on economic data and inflation signals [4][18]. - Adjustable-rate mortgages (ARMs) and home equity lines of credit (HELOCs) are the first to respond to Fed rate cuts, adjusting quickly due to their linkage to short-term benchmarks [6][19]. Market Dynamics - Fixed-rate mortgages, such as 30-year and 15-year loans, react more slowly to Fed actions as they are influenced by long-term Treasury yields, which depend on market expectations for inflation and growth [8][10]. - Recent market behavior shows that mortgage rates can move independently of Fed actions, often following longer-term bond yields [10][11]. Refinancing Opportunities - The current rate environment presents refinancing opportunities for borrowers with loans near or above the current refinance average of 6.5%, especially for those considering shorter-term loans [14][19]. - Analysts suggest that refinancing is beneficial when interest-rate savings exceed closing costs, with 15-year fixed rates averaging about 5.33% [14][19]. Housing Market Outlook - Economists predict that mortgage rates may continue to ease if bond yields remain stable, with some forecasts suggesting sub-6% rates for 30-year loans by late 2025 or early 2026 [15][16]. - Despite recent rate cuts, the housing market faces challenges such as tight inventory and elevated prices, which may hinder demand recovery [16][17]. Future Influences on Mortgage Rates - The trajectory of mortgage rates will largely depend on inflation and Treasury yields; sustained economic slowdown could lead to further declines in long-term yields [17][18]. - Any resurgence in inflation or signs of economic overheating could reverse recent declines in mortgage rates [17][18].

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Let's get to Bloomberg's Michael McKee with that Fed rate decision. The most divided Fed since before the pandemic voted to lower the benchmark rate by 25 basis points as investors expected. But there were three dissents for the first time since 2019.And on the dot plot, a total of six members of the committee suggested they were not in favor of lowering rates. There's also a hawkish line in the statement in considering the extent and timing of additional adjustments to the target range, bringing back langu ...