The United States Federal Reserve announced its eighth and final monetary policy decision for 2024 following a two-day Federal Open Market Committee (FOMC) meeting. In a widely anticipated move, the Fed reduced the benchmark interest rate by 25 basis points (0.25 percentage points) to a target range of 4.25%–4.50%. This marks the Fed's third consecutive rate cut this year and aligns with market expectations.

Chaired by Jerome Powell, the rate-setting panel highlighted that inflation remains "somewhat elevated" in the U.S. economy. Consequently, the Fed now projects only two rate cuts in 2025, signaling a cautious approach amid high inflationary pressures.

This latest decision follows the September meeting, where the Fed enacted a larger 50-basis-point cut the first of such magnitude in four years bringing the benchmark rate to a range of 4.75%–5.00%. That move reflected policymakers’ confidence in progress toward their long-term inflation target of 2%.

The Fed has been navigating a challenging economic landscape since March 2022, when it began aggressively raising rates in response to the most severe inflation in four decades. Over 15 months, the central bank implemented hikes totaling 525 basis points, reaching a peak rate of 5.25%–5.50%. Since July 2023, however, the Fed has kept rates steady to assess progress in curbing inflation, aiming to guide it back to the 2% target range without disrupting economic stability.

This measured approach highlights the Fed's effort to strike a delicate balance between controlling inflation and fostering sustainable economic growth.