The Fed's revised rate outlook is influencing market movements.

The Federal Reserve has revised its projection for interest rate cuts in 2024, predicting only one reduction instead of the previously forecasted three.

The central bank's "terminal rate" for 2024, or the rate at which its benchmark fed funds rate will peak, was increased to 5.1%, equivalent to a target range of 5%-5.25%. This implies that the Fed is only anticipating one quarter-point rate cut from the current target range of 5.25% to 5.5%.

This year, 19 FOMC members, including both voters and nonvoters, indicated that four officials were in favor of no cuts, while seven members projected one reduction. The remaining eight officials forecast two rate cuts for 2024.

Here are the Fed's latest targets:

In March, the Fed predicted three rate cuts this year with the fed funds rate reaching 4.6%. Following a cool inflation report on Wednesday, traders were anticipating two cuts this year before the Fed's new forecast was released.

The central bank predicted four rate cuts or a one-percentage-point reduction in the benchmark fed funds rate for 2025.