Federal Open Market Committee press conference: Live coverage

WASHINGTON — The Federal Reserve is expected to lower its benchmark interest rate Thursday afternoon as part of its budding campaign to ease monetary policy.

Futures traders and market analysts believe the Federal Open Market Committee will lower the federal funds rate by a quarter percentage point. The Fed's commentary around the decision will be equally important for setting expectations about future rate reductions and understanding the committee's view of last month's tepid labor market data.

In September, the FOMC slashed the target range for its benchmark federal funds rate by a half point and projected additional cuts during the months ahead. Fed Chair Jerome Powell attributed the policy shift to the committee's growing confidence in the trajectory for inflation and greater concern about the strength of the labor market.

Most FOMC participants forecasted one or two more rate cuts this year followed by a full percentage point drop in the federal funds rate by the end of 2025, but the group remained noncommittal about the pace of reductions. 

Banks have largely embraced the Fed's move toward a more neutral policy stance. Many project an uptick in demand for loans as borrowing costs come down. The shift will also alleviate unrealized losses in banks' securities portfolios and reduce some stress on products such as commercial real estate loans. At the same time, though, lower rates also present a headwind to bank profitability, primarily by narrowing the gap between the interest they pay on deposits and the interest they collect from borrowers — a measure known as net interest margin.

Through the first half of last month, market participants were split as to whether they thought the Fed would implement a single, 25-basis point cut in November or hold the target range steady at 4.75% to 5%. Sentiment fomented around a quarter-point cut last week after key economic indicators showed inflation stabilizing close to the Fed's 2% target and job creation slowing down in October. 

The Bureau of Labor Statistics' latest employment survey estimated just 12,000 jobs were added to the economy last month. A dropoff in hiring was expected in light of major hurricanes in the South and labor strikes throughout the country, but forecasters still projected an uptick of roughly 100,000 jobs. During his post-meeting press conference, Powell will likely discuss whether the FOMC interpreted that data as an anomaly or a signal of overall weakness.

Likewise, the press conference will provide Powell an opportunity to discuss divergent views among different committee members. In September, Gov. Michelle Bowman voted against the extra large cut, arguing instead that the Fed should have opted for a 25 basis point cut to avoid rekindling excess inflation. 

In a speech delivered shortly after the FOMC's last meeting, Bowman said she would hesitate to read too much into any single economic indicator. If the jobs report proves to be a significant factor in the committee's decision to cut, she could again find herself in a position to voice dissent. 

The meeting comes just one day after Donald Trump was declared the winner of this week's presidential election, a development expected to usher sweeping changes to the economy — and potentially the Federal Reserve, too. 

While Trump's proposed tariff and tax-cut policies could have significant implications for future monetary actions, look for Powell to avoid commenting on fiscal policy proposals and politics writ large.