5 key take home points from FOMC day - nailed it or failed it?

Rate Cut and Pause

The Fed cut interest rates by 0.25% (25 basis points), completing a total of 1% reduction this year.

This is likely the last adjustment for now, as the Fed plans to pause further changes.

One member, Beth Hammack, disagreed, wanting to keep rates unchanged.

Future Rate Cuts and Inflation Timeline

Only two rate cuts are expected in 2025, not three as many thought.

The Fed now predicts inflation will reach its 2% goal by 2027, later than previously estimated.

Powell’s Remarks

Fed Chair Jerome Powell said future rate cuts depend on inflation progress.

He didn’t give clear plans for 2025, stressing flexibility based on the economy.

Policy Adjustments and Neutral Rate

Expectations are shifting with the incoming Trump administration's policies, though specifics are unclear.

The Fed raised its estimate of the "neutral rate," meaning interest rates may stay higher for longer.

Market Reaction

Stocks fell sharply (S&P 500 down 2%), bond yields rose, and the dollar strengthened.

It was a tough day for markets, showing concern over the Fed’s decisions.