Fed Cuts Rates to 4.25%-4.50%; Signals Two Cuts in 2025

Dec 18, 2024, 07:21 PM

The Federal Reserve lowered its benchmark interest rate by a quarter percentage point to a range of 4.25% to 4.50%, marking the third consecutive cut this year and bringing rates to their lowest level since January 2023. The decision, which saw one dissenting vote among policymakers, aligns with market expectations amid signs of slowing economic growth and reaccelerating inflation over the past two months. Federal Reserve officials signaled a slower pace of rate reductions in 2025, projecting just two cuts next year compared to four initially anticipated in September, with the median rate projection now at 3.9% for the end of 2025. The central bank's cautious approach reflects concerns over persistent inflation and the need to balance economic support with price stability. The rate cut offers only slight relief to consumers and businesses facing high borrowing costs for mortgages, auto loans, and credit cards.