U.S. Fed officials dial back rate forecasts, signal just one '24 cut

Federal Reserve officials penciled in just one interest-rate cut this year and forecast more cuts for 2025, reinforcing policymakers’ calls to keep borrowing costs high for longer to suppress inflation.

Officials voted unanimously to keep the benchmark federal funds rate in a range of 5.25 per cent to 5.5 per cent -- a two-decade high first reached in July. But policymakers signaled they now expect to cut rates only once this year, compared to the three reductions forecast in March, according to the median projection.

They now see four cuts in 2025, more than the three previously outlined.

Individual officials’ views on the best path forward for borrowing costs, however, differed. The Fed’s “dot plot” showed four policymakers saw no cuts this year, while seven anticipated just one reduction and eight expected two cuts.