The Fed lowers interest rate and cuts US GDP growth forecast for 2024
The Federal Reserve System of the United States has revised its economic growth forecast for 2024 and lowered the key interest rate, indicating a more cautious approach to future economic policy.
Photo: Federalreserve
The Federal Reserve (Fed) of the United States has downgraded the country's real GDP growth forecast for 2024 to 2% from the previously expected 2.1%, as reported by "Interfax-Ukraine".
Despite this reduction, the Fed predicts that the economy will grow at the same pace over the next three years, reaching a long-term level of 1.8%.
The inflation forecast has also been revised. Consumer prices are expected to rise by 2.3% this year and 2.1% next year. In 2026, this indicator will stabilize at 2%.
Core inflation in 2024, according to the Fed, will be 2.6%, and in the following year — 2.2%.
The unemployment forecast has also been adjusted: it will increase to 4.4% this year and remain at that level until 2025, decreasing to 4.3% in 2026.
At the meeting, the Fed reduced the federal funds rate by 50 basis points, setting the range at 4.75-5%.
By the end of the year, the rate is expected to be 4.4%, and by the end of 2025 — 3.4%. 17 out of 19 Fed officials predict a further rate cut in 2024.