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

ChainCatcher news, according to Forbes, economists and financial market participants indicate 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, Bank of America, Goldman Sachs, and JPMorgan, predict that the Federal Reserve will lower interest rates from 4.5%-4.75% by 25 basis points to 4.25%-4.5%. This will bring 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 clear consensus in the market, 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 expect the median forecast to be reduced from the previous prediction of four rate cuts of 25 basis points next year to three, anticipating 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 a longer period, as rates are likely to remain above 3% for an extended time, a threshold that was never reached from 2009 to 2021.