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On Wednesday, the Federal Reserve cut its key interest rate by a quarter of a percentage point, the third consecutive cut, but it was accompanied by a cautious tone about making additional cuts in the coming years.

The US Federal Reserve announced a 25 basis point cut in US interest rates from 4.75% to 4.5%, and also issued its forecast for interest rates in the coming years.

The Fed’s dot plot data showed that it intends to cut interest rates by 50 basis points in 2025, which means only two cuts of 50 basis points, down from the previous forecast of a 100 basis point cut in 2025.

It also explained that it intends to hold at 3.5% in 2026 instead of cutting to 3% as stated in previous dot plot data. As for 2027, it is expected to cut to 3% levels, 25 basis points higher than previously expected. In the long term, the Fed expects interest rates to stabilize