Fed Cuts Interest Rates by 25 Basis Points

The video discusses the Federal Reserve's forecast for rate cuts, with expectations reduced to two cuts next year and additional cuts in 2026 and 2027. The long-term Fed funds rate is expected to rise to 3%, reaching the neutral rate by 2028. There is dissent within the committee, with some members preferring to leave rates unchanged. The Fed's statement now emphasizes careful assessment of incoming data for rate adjustments. Inflation forecasts have been revised upwards, with headline and core inflation expected to be 2.5% by the end of next year. Unemployment is projected to be 4.3%, and GDP growth is expected to slow down to 2.1% by 2026. A technical adjustment was made to the offering rate for overnight reverse repurchase agreements, lowering it to 4.25%.

What is the GDP growth forecast for the economy at the end of this year?

What change did the Fed make regarding the offering rate for overnight reverse repurchase agreements?