- Prior was 4.50-4.75%
- The market was 97% priced in for a 25 bps cut
- Pricing was for 73.3 bps of cuts through 2025, including today
- USD/JPY was trading at 153.77 ahead of the release
Fed Funds Rate Median:
- 2024: 4.4% → No change from September
- 2025: 3.9% → Up from 3.4%
- 2026: 3.4% → Up from 2.9%
- 2027: 3.1% → Up from 2.9%
- Longer run: 3.0% → Up from 2.9%
Goldman Sachs forecast the median dot to show 3 cuts in 2025 to 3.625%, 2 further cuts in 2026 to 3.125%, and a flat path in 2027 at 3.125%. So these 2025 and 2026 dots were more hawkish than forecast.
This article was written by Adam Button at www.forexlive.com.