Financial Markets & Consumer Spending

Decision kicks off greater reduction cycle. The Federal Open Market Committee (FOMC) slashed the federal funds rate by 50 basis points during its September meeting, setting the lower bound at 4.75 percent. The first cut since March 2020, this decision reflects the Fed's confidence that inflation is moving sustainably toward 2 percent and its intent to prevent further labor market softness. In August, headline CPI was up 2.5 percent annually, with unemployment sitting at 4.2 percent. With two meetings remaining in 2024, the Fed could lower interest rates further, which would aid investor demand for commercial real estate.