BOSTON, MA, December 13, 2023 — The Federal Open Market Committee (FOMC) met today to assess the state of the U.S. economy and monetary policy. 

What We Learned

For the third consecutive meeting, the FOMC left the Federal Funds Target Rate (fed funds) unchanged at 5.25-5.50%. The decision demonstrated that the committee is attempting to balance the risks of easing prematurely and inflation remaining above the 2% target vs. moving too slowly and causing a recession with an unnecessarily restrictive policy. The FOMC also released its dot plot and updated Summary of Economic Projections (SEP). Although inflation appears to be headed in the right direction, the Fed remains focused on achieving its 2% inflation objective. Additionally, the median December dot plot projects three rate cuts in 2024, less than the market’s current estimate of four cuts. The current fed funds projection for year-end 2024 of 4.6% reflects a 50 basis points lower estimate than projected last quarter. However, this reflects the current committee composition which will change at year-end. The March 19-20, 2024 meeting will provide the first opportunity to see the new committee’s forecast. 

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