Following a series of interest rate hikes earlier in the year, the Federal Reserve on Wednesday announced its widely expected decision to leave rates unchanged for the third consecutive meeting.
The projections provided by the Fed along with its monetary policy announcement also suggest the central bank plans to begin cutting rates next year.
In support of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run, the Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.50 percent.
The accompanying statement said the decision came as economic growth has slowed from its strong pace in the third quarter, while inflation has eased over the past year.
With regard to outlook for rates, the statement notably included the word "any" with regard to whether "any additional policy firming" may be appropriate.
The projections provided by the Fed also suggest the central bank will begin cutting rates next year, with the median forecast indicating rates will be lowered to 4.6 percent by the end of 2024.
The median forecast points to rates in a range of 4.50 to 4.75 percent, hinting the Fed plans to cut rates by 25 basis points three times next year.
Following the September meeting, the Fed had forecast raising rates by another 25 basis points this year before lowering rates to a range of 5.0 to 5.25 percent by the end of 2024.
"Additional rate hikes no longer appear to be part of the conversation," said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni. "It is all about the pace of cuts from here."
The Fed's latest projections also suggest consumer price inflation is expected to slow to 2.4 percent by the end of 2024, while GDP growth is expected to slow to 1.4 percent.
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