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For additional information relating to this article, please contact:

Thomas StorringDirector – Economics and Statistics
Tel: 902-424-2410Email: thomas.storring@novascotia.ca

December 18, 2024
US FEDERAL RESERVE MONETARY POLICY

At its scheduled Federal Open Market Committee (FOMC) meeting on December 18th, the US Federal Reserve announced that it reduced the target range for the federal funds rate by 0.25 percentage points to 4.25% to 4.50%. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.

Recent economic indicators show that the US economy has continued to expand at a solid pace. US real GDP growth was estimated at 2.8% in the third quarter of 2024 supported by government and consumer spending, exports and investment. The Federal Reserve projects that real GDP will grow by 2.5% in 2024 and 2.1% in 2025, growth was revised up from the September projection. Labour market conditions have eased and unemployment rate has moved up but remains low. Unemployment rate is projected to be down to 4.2% in 2024 and 4.3% in 2025. Inflation has made progress toward the committee's target of 2%, but remains elevated. The United States Consumer Price Index (not seasonally adjusted) for All Urban Consumers increased 2.7% year-over-year in November 2024. Federal Reserve projects inflation at 2.4% in 2024 and 2.5% in 2025, revised up from the September forecast.

The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the long run. The next scheduled FOMC meeting will be held on January 28-29, 2025.

Source: US Federal Reserve, FOMC Press ReleaseFOMC December Projections



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