The Federal Open Market Committee (FOMC) median interest rate projection for the end of 2024 was 5.1% – so a single cut of 25bps from the current 5.25% to 5.5% range.

This is a big change from the last release of this publication in March – in which the FOMC predicted median was 4.6% by the end of the year – so 3 rate cuts.

Their median projection for the end of 2025 is now 4.1%. So four 25bps cuts in 2025.

Inflation has been higher than expected – making the committee more cautious. Inflation data has looked better recently. Lower energy prices has helped – a trend that is expected to continue as OPEC+ increases supply to avoid losing market share.

The committee members also increased their projection of the long-run policy rate to 2.8% from 2.6% in March.

With all this, the expected benefits to issuers in waiting to issue are reduced.