The Fed cuts the rates for the first time in 2025. The cost of money falls by a quarter point in a fork between 4.0% and 4.25%.
The Fed should cut the interest rates two more times in 2025 for a total of half a point, according to what emerges from the Dot-Plot, the tables with the voting intentions of the members of the FOMC.
The average of two cuts for 2025 is the result of various forecasts among the voting members of the Fed. For one in fact there will be no other reduction this year, for six voting members there will be one from a quarter of point, for others there will be two scissors from a quarter point. Nine voting members, on the other hand, support three cuts from a quarter of point this year, while one has been said in favor of a total reduction of 150 points by the end of 2025.
The US Central Bank also revised growth estimates for 2025 to 1.6%. For 2026, the growth of the US economy is estimated at 1.8%.
According to the Fed, the risks for employment have increased and the inflation remains high and the central bank “aims to hit the maximum employment and inflation at 2% in the long run. The uncertainty on the economic perspectives remains high. We believe that the risks downward for the employment have increased”, reads the release released at the end of the meeting.
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