On September 18, 2024, the Federal Open Market Committee (FOMC) cut its federal funds target range by 0.5 percentage point—50 basis points—from 5.25–5.50% to 4.75–5.00%. The September 2024 projections pointed to a lower policy rate by year-end, but they were participants’ estimates, not a promise of further cuts.
What the Fed decided
At its September 17–18, 2024 meeting, the FOMC reduced the target range for the federal funds rate by 0.5 percentage point. It was the first reduction since 2020.
| Measure | September 2024 decision or projection |
|---|---|
| Size of the cut | 0.5 percentage point, or 50 basis points |
| Target range before the cut | 5.25–5.50% |
| Target range after the cut | 4.75–5.00% |
| Median projected federal funds rate at end of 2024 | 4.4%, in the September 2024 Summary of Economic Projections |
| Median projected federal funds rate at end of 2025 | 3.4%, in the September 2024 Summary of Economic Projections |
The projected figures are medians of FOMC participants’ assessments, not later-confirmed outcomes or current rate data.
Why the Fed cut rates
The Fed described the move as a recalibration of policy in response to progress on inflation and a changed balance of risks. Chair Jerome Powell said in his September 18, 2024 press-conference opening statement that inflation had moved closer to the Fed’s objective while labor-market conditions had cooled.
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The Fed’s mandate covers both maximum employment and price stability. The decision therefore reflected how officials assessed risks to both goals; it was not a declaration that inflation had been fully defeated or that a recession had begun.
Did the Fed signal more cuts in 2024?
The September 2024 Summary of Economic Projections put the median participant estimate for the federal funds rate at 4.4% at the end of 2024, below the 4.875% midpoint of the new target range. That indicated expectations for additional easing on average, but did not set a schedule or guarantee another cut.
The projections collect individual participants’ most-likely rate assessments under their own economic outlooks. Powell emphasized that the Fed had no preset course: “We are not on any preset course. We will continue to make our decisions meeting by meeting.” The transcript also makes clear that projections depend on how participants expect the economy to evolve.
What the cut meant for household borrowing
The federal funds target is a short-term policy rate, not a rate directly assigned to every consumer loan. A change in the target does not require mortgage, credit-card, or auto-loan rates to fall by the same amount or at the same time. Those rates use different benchmarks and reflect other pricing factors, so the policy move alone does not establish what a borrower’s rate will do.
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How to read this recap today
This is a historical account of the September 2024 meeting. The target range and projections above describe that decision and its accompanying outlook; they should not be treated as current rates or as the latest Fed outlook.
Quick Recap
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