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19 Dec 2024

International Economy

FOMC meeting, December 17-18, 2024: Fed cut the policy rate by 0.25% as expected, and plans to cut the rate twice in 2025 (Business Brief No.4110 Full Ed.)

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FOMC meeting, December 17-18, 2024: Fed cut the policy rate by 0.25% as expected, and plans to cut the rate twice in 2025 

  • During the FOMC meeting held on December 17-18, 2024, the US Federal Reserve (Fed) decided, with a majority vote of 11 to 1, to cut the policy interest rate by 0.25 percent, from the range of 4.50-4.75 percent to 4.25-4.50 percent, as anticipated by the market.
  • However, the Fed signaled a plan to lower the policy rate only twice in 2025, a reduction from the previous projection of four rate cuts, amid concerns that inflation risks may not subside as quickly as previously expected.
  • KResearch views the Fed is likely to trim the policy rate twice in line with the latest Dot Plot. Nonetheless, there remain risks associated with US policies under President Trump's administration, particularly regarding measures such as import tariff hikes, restrictions on immigrant labor, and income tax reductions, which could increase inflationary pressures in the US.

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