Editor’s note: This story has been updated to clarify the exact words from the September Fed statement that were in omitted in November: “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent.”

The Federal Reserve lowered interest rates by 0.25 percentage points on Thursday, as widely anticipated by the market, bringing the federal funds rate to a target range of 4.5% to 4.75%, the lowest since February 2023.

With this decision, the Fed slowed the pace of rate cuts compared to September, when policymakers opted for a more substantial 0.5% cut to initiate the easing cycle.

The Fed’s November policy statement continued to highlight that the economy has expanded at a “solid pace,” job growth “has generally eased” and inflation “has made further progress” toward the 2% target, although it remains “somewhat elevated.”

The Personal Consumption Expenditure (PCE) inflation rate eased to 2.1% year-over-year in September 2024, marking its smallest increase since February 2021. The Fed’s preferred inflation measure, the core PCE price index, which excludes food and energy, remained steady at 2.7%.

Yet the November statement surprisingly omitted a line from September that stated: “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent.”

The Fed reiterated a data-driven approach and highlighted the need to monitor economic implications for future policy decisions, refraining from committing to a predetermined path.

The next Federal Open Market Committee (FOMC) meeting is scheduled for December 18, 2024.

Financial markets are placing a 66% probability on another 25-basis-point cut at the year’s final meeting, as per CME FedWatch, though expectations have dropped significantly following this week’s election results.

Market attention now shifts to Fed Chair Jerome Powell‘s press conference at 2:30 p.m. ET.

Powell is expected to face questions on potential inflationary pressures from Trump’s trade tariffs and anticipated higher budget deficits and how the Fed might respond to changes in the economic and political landscape.

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Illustration of Federal Reserve Chair Jerome Powell created using artificial intelligence via MidJourney.