Core Viewpoint - The Federal Reserve has decided to lower the federal funds rate target range by 25 basis points to between 4.00% and 4.25%, marking the first rate cut since December 2024 [1] Summary by Relevant Sections Federal Reserve Decision - The decision aligns with market expectations, as indicated by HSBC Global Research economist Ryan Wang [1] - The latest dot plot shows that there is still disagreement among Federal Reserve officials regarding the future path of rate cuts [1] Future Rate Predictions - HSBC maintains its previous forecast that the Federal Reserve will implement two more rate cuts of 25 basis points each by the end of 2026, bringing the target range down to 3.5% to 3.75% [1] Economic Factors - Factors such as expansionary fiscal policy, the sticky nature of inflation due to tariff effects, and pressure from a depreciating dollar may keep the core PCE inflation level relatively high in the U.S. until 2026 [1] - If the labor market worsens, particularly with an increase in unemployment claims, the Federal Reserve may consider another 25 basis point cut in October or a larger cut next year [1]