The Federal Reserve cut the federal funds rate 50 basis points to a 4.75-5.00 percent target range on September 18, 2024, the first reduction since March 2020, per the FOMC's published decision. The committee's statement said it has "greater confidence" inflation is moving toward 2 percent and judged the risks to its employment goal have increased. One governor dissented — Michelle Bowman preferred 25 basis points, the first governor-level dissent since 2005, per the meeting record. The Daily News 24 publishes information, not investment advice.
The size was the story. Markets had priced a coin-flip between 25 and 50 basis points into the meeting, and the larger move came with the committee's own projections showing the median path at another half point of cuts by year-end 2024.
What did the projections show?
The median participant saw the policy rate at 4.4 percent at end-2024 and 3.4 percent at end-2025, per the Summary of Economic Projections released with the decision. The median unemployment projection rose to 4.4 percent for 2024, and core PCE inflation was projected at 2.6 percent for the year. Projections are each participant's estimate, not a committee promise; the same document said so in its footnotes.
What did the statement change?
The employment language. The September statement said the committee is "strongly committed" to maximum employment in addition to its inflation goal — an addition to prior statements that highlighted inflation alone as the risk. Chair Powell's post-meeting press conference, per the transcript, described the cut as a recalibration of policy toward neutral, not the start of a long series; he also said the committee is not declaring victory on inflation.
What has the data shown since?
The context the committee acted on: CPI inflation had fallen from a 9.1 percent June 2022 peak to 2.5 percent in August 2024, per the BLS, while the unemployment rate rose from 3.4 percent in April 2023 to 4.2 percent in August 2024, per the BLS household survey. Payroll gains had slowed — the twelve-month average fell below 200,000 by the September 2024 jobs report, a level last seen in 2019.
A comparison the release itself does not make: the 2024 easing began with the funds rate at its highest since 2001 and the ratio of job openings to unemployed persons near 1.1, per BLS JOLTS — a labor market roughly half as tight as the 2.0 ratio at the 2022 tightening's start.
What happens next?
Procedurally: the committee met twice more in 2024, cut 25 basis points at each, ending the year at 4.25-4.50 percent, per the FOMC calendar of decisions. The January 2025 meeting held the range steady. The timing of further moves is the FOMC's decision at future meetings, and this site does not predict it — the median projections quoted above belong to the participants who filed them, with the date attached.
For more context, read BLS Prices Nearly 80,000 Items to Build the CPI.