What happened: The Fed reduced its benchmark interest rate by 25 basis points to a range of 4.00–4.25%, ending a streak of five straight pauses. More importantly for markets, the Fed’s updated "dot plot" projects two more cuts this year, with a longer-term target of 3.1% by the end of 2027—down from a 3.4% projection in June.

Zoom in: The median forecast from Fed officials places the year-end fed funds rate at 3.6%, with projections ranging from 2.9% to 4.4%. Following the announcement, prediction market Kalshi saw the odds of three total cuts this year jump to 67%, up from 48% the day before.