AsianFin -- The Federal Reserve’s latest projections indicate that policymakers now expect two additional interest rate cuts in 2025, following the quarter-point reduction announced Wednesday.

If implemented, this path would bring the benchmark federal funds rate down to a range of 3.50% to 3.75% by year-end.

On Wednesday, the Fed lowered its key rate by 0.25 percentage points to a target range of 4.00% to 4.25%, marking the central bank’s first reduction in 2025. In June, officials had signaled only two cuts for the entire year, which would have lowered the rate to 3.75%–4.00% by December.

Alongside the policy move, the Fed released updated economic projections in its Summary of Economic Projections (SEP), offering new guidance on expected growth, inflation, and unemployment trends.

The central bank raised its forecast for year-end economic growth while keeping inflation and unemployment projections largely unchanged. However, officials noted that downside risks to employment have increased, signaling a cautious outlook despite the anticipated easing of monetary policy.