FOMC cuts rates by a quarter point; Projects Fewer next year; Powell Speech Highlights

On By Littum

Federal Reserve officials forecast inflation will remain higher than previously expected, with price growth remaining above their 2% target throughout next year, according to their updated summary of economic projections released Wednesday.

Inflation, as measured by the consumer price index, is now expected to end 2025 at an annual rate of 2.5%, higher than officials’ September estimate of a 2.1% pace.

Fed Chairman Jerome Powell said at a news conference Wednesday that while policymakers’ previous inflation projection had “kind of fallen apart” toward the end of the year, officials “wouldn’t be content” to miss that 2% target.

“We certainly have every intention and expectation that we will get inflation back to 2% sustainably,” he said.

And while the process has taken longer than expected, the central bank has “made quite a bit of progress,” Powell added.