The minutes from the Federal Reserve's last meeting of 2024 will add further context to officials' thinking about the paths of the economy, interest rates, and inflation in the coming years. Policymakers lowered their interest-rate target after their Dec. 17-18 confab, while signaling a slow and gradual pace of rate cuts ahead.
Minutes from the meeting will be published at 2 p.m. Eastern on Wednesday. The Federal Open Market Committee -- the Fed's policymaking committee -- last month voted to lower the federal-funds rate target range by a quarter of a percentage point, to 4.25% to 4.5%, for their third-straight cut.
In their quarterly update to the Summary of Economic Projections, Fed officials' median estimate for the federal-funds rate target range at the end of this year moved to imply a range of 3.75% to 4.0%. That's half of a percentage point below its current level.
The median forecast in the previous so-called "dot plot," from September, implied a full percentage point of cuts in 2025. The dot plot charts the individual projections of the seven members of the Fed's Board of Governors and the 12 regional Fed presidents, for 19 anonymous dots in total. The median dots implied another half-point of cuts in 2026, then a quarter-point decrease in 2027, which would take the fed-funds rate target range to 3.0% to 3.25%.
Officials forecasted inflation remaining more elevated in 2025 than previously expected, finishing the year at 2.5% as measured by the Fed's preferred price gauge. They also expected the unemployment rate to tick up this year, but at a slower pace than before. December jobs data is due on Friday morning.
In his post-meeting press conference on Dec. 18, Fed Chair Jerome Powell said that there's more uncertainty about the timing of future interest-rate decreases, tying future moves to observed progress on slowing inflation. A resilient jobs market and solid economy mean the Fed doesn't need to rush to cut to save growth in 2025 either, Powell suggested.
"With today's action, we have lowered our policy rate by a full percentage point from its peak," Powell said. "And our policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate."
The decision to cut by a quarter of a point on Dec. 18 wasn't unanimous: there was one dissenting vote from Cleveland Fed President Beth Hammack, who preferred no change. She is no longer a voter on the FOMC in 2025, with four new regional Fed presidents rotating in.
Since the December FOMC meeting, the November inflation data came in softer than expected -- but still too high. The Fed has a 2% annual inflation target, as measured by the personal consumption expenditures price index.
Policymakers will next meet on Jan. 28-29, when they will also have December employment and inflation data. Interest-rate futures markets on Tuesday were pricing in a less-than 5% chance of a rate decrease then, and the greatest odds of just one quarter-point cut in all of 2025.