Forbes: A 25 basis point rate cut has become market consensus; the key lies in the signals the Federal Reserve sends regarding next year's monetary policy.

BlockBeats news, on December 18, according to Forbes, economists and financial market participants have indicated that the Federal Reserve is very likely to announce a 25 basis point rate cut in the early hours of the 19th. However, perhaps more noteworthy is what signal the Federal Reserve will send regarding its monetary policy goals for 2025.

Currently, economists from the three major investment banks in the U.S., Bank of America, Goldman Sachs, and JPMorgan Chase, predict that the Federal Reserve will lower interest rates by 25 basis points from 4.5%-4.75% to 4.25%-4.5%. This will bring interest rates down to the lowest level since February 2023, a full percentage point lower than the 5.25%-5.5% range from July to September 2023.

However, despite the market reaching a clear consensus on this, the Federal Reserve will also release its quarterly economic forecast. This includes each central bank president's expectations for interest rates in 2025. Economists from Bank of America, Goldman Sachs, and JPMorgan Chase expect the median forecast to be revised down from four rate cuts of 25 basis points next year to three, with a target range of 3.5%-3.75% by the end of 2025. Regardless, it is clear that Americans will need to adapt to higher interest rates for an extended period, with rates likely remaining above 3% for a long time, a threshold that was never reached during the period from 2009 to 2021.