Back
Federal Reserve Poised for 25 Basis Point Rate Cut to 3.75%-4%

Federal Reserve Poised for 25 Basis Point Rate Cut to 3.75%-4%

Updated CME FedWatch data shows a 67.3% chance of a December rate cut, with markets also weighing potential cumulative reductions into January.

Fact Check
The assessment is based on the overwhelming weight of high-authority primary evidence directly supporting the statement. The most crucial source is the official FOMC statement from December 18, 2024, which is described as the "definitive primary source for any monetary policy decision made on that date, including changes to the federal funds rate target range." This source directly confirms that an official decision was announced.This conclusion is corroborated by other official Federal Reserve sources that serve as directories, such as the index of 2024 FOMC press releases and the main press releases landing page, which validate that such an announcement would be found in a press release like the one cited. Furthermore, supplementary sources dated in 2025, including minutes and a speech by Governor Waller, indicate a dovish policy environment and discussion of 25 basis point cuts, which is thematically consistent with a rate cut having occurred in late 2024.The sources that could be interpreted as contradictory are either irrelevant or weak. Two sources are press releases from 2001 and 2019, making them irrelevant to a 2024 decision. Another source mentions the 3.75%-4.00% range in a "historical context," but this is from a general informational page, which holds significantly less authority than a specific, dated policy announcement from the FOMC. Given the direct and authoritative nature of the primary evidence, the statement is highly likely to be true.
Summary

According to CME FedWatch data, there is a 67.3% probability the U.S. Federal Reserve will lower interest rates by 25 basis points in December, while the chance of no change stands at 32.7%. For January, probabilities indicate a 55.8% likelihood of a cumulative 25 basis point cut and a 22.3% chance for a total 50 basis point reduction. These figures reflect evolving market expectations following the Fed's recent adjustment of the federal funds rate to 3.75%-4.00%, citing economic slowdown and varied policy opinions.

Terms & Concepts
  • Basis Point: A unit of measure equal to one hundredth of a percentage point, often used to describe changes in interest rates.
  • Federal Funds Rate: The interest rate at which depository institutions lend reserve balances to other banks overnight, set by the Federal Reserve.