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Cost of Capital Likely to Remain High
as New Fed Chair Rethinks Playbook
Fed rate unchanged amid a more restrictive outlook. Economic uncertainty led the Federal Open Market Committee to unanimously agree to hold the overnight lending rate at the lower bound of 3.5 percent. The FOMC maintains that the current rate aligns with its dual mandate. However, committee members remain open to data-driven adjustments in the future. According to the Summary of Economic Projections, the median participant judged 3.8 percent to be the appropriate year-end rate, per the dot plot.