News
  • Vignesh S G
    author-profile

    Vignesh S G right arrow

    Author

    Vignesh is a young journalist with a decade of experience. A proud alumnus of IIJNM, Bengaluru, he spent six years as a Sub-Editor for a leading business magazine, published from Kerala. His interest in futuristic technologies took him to a US-based software company specialising in Web3, Blockchain and AI. This stint inspired him to view the future of journalism through the lens of next generation technologies. Now, he covers the crypto scene for Coinpedia, uncovering a vibrant new world where technology and journalism converge.

    • 2 minutes read

    FED Rate Cut Expectations: What 25bps Could Mean for You

    Story Highlights
    • Despite efforts to stabilize the economy, inflation pressures have increased significantly in recent months, complicating the Federal Reserve's task.

    • Despite efforts to stabilize the economy, inflation pressures have increased significantly in recent months.

    • A deteriorating job market, evidenced by rising jobless claims, has been a key factor driving the consideration of interest rate cuts.

    Today marks the US Federal Reserve’s final meeting for 2024, with key announcements expected. A 25 basis point interest rate cut is widely anticipated, which could have a big impact on the economy. Letโ€™s take a closer look at what this potential decision means.

    US Fed Expected to Cut Rates Again 

    Kalshi data suggests there is at least a 96% chance that the Federal Reserve will announce a 25 basis point rate cut today. If confirmed, this will be the third rate cut of 2024, bringing the total reductions for the year to 100 basis points.

    Rising Inflation Challenges the Fed

    Despite the rate cuts, inflation has been climbing steadily in recent months, making the Fedโ€™s job of stabilizing the economy more difficult. The US Consumer Price Index (CPI), which was 308.417 points in January, increased to 313.55 points in April. It reached its yearly peak of 315.66 points in October before slightly falling to 315.49 points in November.

    The Producer Price Index (PPI) also showed an upward trend. From 142.683 points in January, it grew to 144.834 points by June and continued rising, hitting 146.493 points in November.

    The Personal Consumption Expenditure (PCE) price index saw similar growth. It started at 122.115 points in January, surged to 124.266 points in October, and followed a steady upward trajectory throughout the year.

    Job Market Weakens

    A weakening job market has played a major role in the Fedโ€™s considerations. While the job market showed improvement earlier in the year, recent data suggests a slowdown.

    Initial jobless claims, which were at 224,000 on November 30, rose to 242,000 in the first week of Decemberโ€”matching levels seen at least eight weeks earlier.

    Continuing jobless claims also increased, from 1.87 million on November 23 to 1.89 million by November 30.

    What to Expect for 2025

    As the Federal Reserve looks to 2025, a new administration will take office in the White House. One of the new governmentโ€™s biggest challenges will be balancing inflation control with economic growth. This will likely influence future Fed policies, making the upcoming year critical for the economy.

    Never Miss a Beat in the Crypto World!

    Stay ahead with breaking news, expert analysis, and real-time updates on the latest trends in Bitcoin, altcoins, DeFi, NFTs, and more.

    FAQs

    When Will the Fed Announce the Rate Cut?

    The Fed is expected to announce a 25 basis points rate cut today, December 18, 2024, after their final meeting of the year.

    When is the Fed meeting in December?

    The US Fedโ€™s final meeting for 2024 is held today, December 18, with key announcements on interest rates expected afterward.

    When is the next FOMC meeting

    The next FOMC meeting after December 2024 will take place in January 2025, following the new administrationโ€™s assumption of office.

    Show More

    Related Articles

    Back to top button