The Fed's dot plot shows one member wants to cut rates like crazy by the end of the year

"The quarter-point reduction is in alignment with expectations and a reaction to slow growth in the job market and stubborn inflation. Alongside the rate cut, the Fed released the FOMC members' economic projections for the next few years, including where they project interest rates to end up. The median member expected another half percentage point of reductions by the end of the year - or one normal-sized quarter-percent cut at each of the two remaining Fed meetings."

"If the Fed were to move forward with that member's suggested cuts, it would require multiple exceptionally large moves through the rest of the year, which are typically reserved for major economic downturns. In addition to the strong downward outlier, one FOMC member projected that rates would be back above 4.25% by the end of 2025. That would mean walking back Wednesday's rate cut and actually hiking rates by a quarter percent from where they stand."

The Federal Open Market Committee cut its policy rate by 0.25 percentage points in response to slow job growth and persistent inflation. FOMC median projections indicate another 0.50 percentage points of reductions this year, implying one quarter-point cut at each of the two remaining meetings. One member pushed for a far larger reduction totaling 1.25 percentage points, equivalent to five typical cuts, which would require multiple unusually large moves. Another member projected rates rising above 4.25% by end-2025, implying rate hikes after the cut. The Fed bases decisions on unemployment, nonfarm payrolls, inflation, and GDP under its dual mandate.

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