Finance

The Fed’s dot plot shows only two rate cuts in 2025, fewer than previously projected

Published

5 months ago

December 18, 2024

U.S. Federal Reserve Chair Jerome Powell speaks during a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., November 7, 2024.

Annabelle Gordon | Reuters

The Federal Reserve on Wednesday projected only two quarter-point rate cuts in 2025, fewer than previously forecast, according to the central bank’s medium projection for interest rates.

The so-called dot-plot, which indicates individual members’ expectations for rates, showed officials see interest rates falling to 3.9% by the end of 2025, equivalent to a target range of 3.75% to 4%.The Fed had projected four quarter-point cuts, or a full percentage point reduction in 2025, in September.

On Wednesday at the Fed’s last policy meeting of the year, the committee cut its overnight borrowing rate to a target range of 4.25%-4.5%.

A total of 14 out of 19 officials penciled in two quarter-point rate cuts or fewer in 2025. Only five members projected more than two rate cuts next year.

Assuming quarter-point increments, officials indicated two more cuts in 2026 and another in 2027. Over the longer term, the committee sees the “neutral” funds rate at 3%, 0.1 percentage point higher than the September update as the level has drifted gradually higher this year.

Here are the Fed’s latest targets from 19 FOMC members, both voters and nonvoters:

The projections also will showed slightly higher expectations for inflation. Projections for headline and core inflation according to the Fed’s preferred gauge were hiked to respective estimates of 2.4% and 2.8%, compared to the September estimates of 2.3% and 2.6%.

The committee also pushed up its projection for full-year gross domestic product growth to 2.5%, half a percentage point higher than September. However, in the following years, the officials expect GDP to slow down to its long-term projection of 1.8%.

As for unemployment rate, the Fed lowered its estimate to 4.2% from 4.4% previously.

— CNBC’s Jeff Cox contributed reporting.

Finance

Insiders at UnitedHealth are scooping up tarnished shares

Published

14 hours ago

May 16, 2025

Business Finance News

Key Points

UnitedHealth Group saw some of its insiders step in and purchase declining shares this week.
Kristen Gil, a director at the firm, bought 3,700 shares worth roughly $1 million on Thursday.
Shares of UnitedHealth plunged nearly 11% to $274.35 on Thursday following a report in The Wall Street Journal that the Department of Justice is conducting a criminal investigation into possible Medicare fraud.

Finance

Federal Reserve will reduce staff by 10% in coming years, Powell memo says

Published

15 hours ago

May 16, 2025

Business Finance News

U.S. Federal Reserve in Washington, DC, on January 30, 2024.

Mandel Ngan | Afp | Getty Images

The Federal Reserve will look to reduce its headcount by 10% over the next couple of years, including offering deferred resignation to some older employees, central bank chair Jerome Powell said in a memo.

“Experience here and elsewhere shows that it is healthy for any organization to periodically take a fresh look at its staffing and resources. The Fed has done that from time to time as our work, priorities, or external environment have changed,” Powell said in a memo obtained by CNBC.

The central bank chief added that he has instructed leaders throughout the Fed “to find incremental ways to consolidate functions where appropriate, modernize some business practices, and ensure that we are right-sized and able to meet our statutory mission.” One method for shrinking the staff will be to offer a voluntary deferred resignation program to employees of the Federal Reserve Board who would be fully eligible to retire at the end of 2027.

The central bank said in its 2023 annual report that it had just under 24,000 employees. A 10% reduction would bring that number below 22,000.

The memo comes as the Trump administration has pushed for cost cuts across civil service agencies, spearheaded by Elon Musk and the so-called Department of Government Efficiency. Musk has previously called the Fed “absurdly overstaffed.” Powell’s memo did not mention Musk or DOGE as a factor in the decision to shrink headcount.

The planned staff cuts were first reported by Bloomberg News.

— CNBC’s Matt Cuddy contributed reporting.