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The Federal Reserve has cut interest rates for the third consecutive time (CNBC).

What’s going on: “In a move widely anticipated by markets, the Federal Open Market Committee cut its overnight borrowing rate to a target range of 4.25%–4.5%, back to the level where it was in December 2022 when rates were on the move higher.”

• Announcing the quarter-percentage-point cut, the central bank “indicated that it probably would only lower twice more in 2025.”
• They indicated two rate reductions in 2026 and another in 2027.

On GPD, unemployment: The Fed increased its projection for full-year gross domestic product growth to 2.5%, a half percentage point higher than three months ago.

• The committee also “lower[ed] its expected unemployment rate this year to 4.2%.”

Why it happened: Inflation has remained steadily above the Fed’s goal of 2%, while unemployment has stayed around 4%—and while “those conditions would be most consistent with the Fed hiking or holding rates in place, officials are wary of keeping rates too high and risking an unnecessary slowdown in the economy.”