The Federal Reserve announced a 25 basis point rate cut, with expectations for two more cuts next year, two in 2026, and one in 2027. The long-term federal funds rate is projected to rise to 3%. There was one dissent from the Cleveland Fed President, who preferred to keep rates unchanged, and three other committee members agreed with her. The Fed's statement now includes a promise to carefully assess incoming data when considering further rate adjustments. Inflation forecasts have been revised upwards, with the PCE headline and core inflation expected to be 2.5% by the end of next year, up from previous forecasts. Unemployment is projected to be 4.3% by the end of next year, slightly lower than earlier predictions. GDP growth is expected to be 2.5% this year, with a slowdown to 2.1% in 2026. Additionally, the Fed lowered the offering rate for overnight reverse repurchase agreements by 30 basis points.