The Federal Open Market Committee (FOMC) has opted to lower the federal funds rate by a quarter percentage point to a range of 4.25-4.5%. This decision aims to strike a balance between achieving maximum employment and maintaining stable prices. The FOMC views the economy as strong, highlighted by steady GDP growth and a labor market that, while cooling, remains robust. Although inflation has eased significantly, it is still slightly above desired levels. As a result, the FOMC is taking a cautious approach to future rate changes, focusing on data-driven decisions to sustain economic strength while working towards a 2% inflation target. Upcoming rate cuts will depend on new data and the shifting economic landscape, with a slower pace expected compared to earlier forecasts due to persistent inflation and ongoing uncertainties.
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