On the early morning of September 19th (Thursday) Beijing time, the Federal Reserve announced a 50 basis point reduction in the benchmark federal funds rate range to 4.75% -5.00%.
The latest released dot matrix chart shows that the Federal Reserve is highly likely to continue cutting interest rates in the future. A dot plot is a prediction of future interest rate trends by Federal Reserve officials, and each official will indicate their own views on future interest rates on the plot.
Specifically, the median expectation of the Federal Reserve's 19 policy makers (each corresponding to a blue dot in the above chart) for the end of 2024 is between 4.25% and 4.50%, which is 50 basis points lower than the current rate. This means that the Federal Reserve will cut interest rates by another 50 basis points this year, and will cumulatively cut interest rates by 100 basis points in 2024.
The dot plot also shows that Federal Reserve policy makers expect interest rates to fall between 3.25% and 3.50% by the end of 2025, which means a cumulative rate cut of 100 basis points next year. In 2026, the interest rate will be reduced by 50 basis points, and the long-term interest rate will remain between 2.75% and 3.00%.
It is worth noting that there may also be differences among Federal Reserve policy makers, and their views on interest rate adjustments will change with changes in the economic situation. The expectations displayed in the current dot matrix can be referred to, but cannot be blindly followed.