The Federal Reserve lowered its benchmark interest rate by a quarter percentage point to 4.3%, marking the third reduction this year and the final one for 2023. The move aims to ease borrowing costs and stimulate economic growth as inflation continues its downward trend. While the rate cut could indirectly impact borrowing costs for various loans, including mortgages and auto loans, the immediate impact on consumers is expected to be minimal. The Fed projects two rate cuts next year instead of the four initially anticipated, reflecting the current economic outlook.
The Fed announced Wednesday a quarter-point cut to its benchmark rate, from about 4.6% to roughly 4.3%.This is the third rate cut - and final one - of the year. Here’s what to know and what it means looking into 2025: With inflation now much lower — at 2.3% in October, according to the Fed 's preferred gauge, down from a peak of 7.2% in June 2022 — many Fed officials argue that interest rates don't need to be so high.
The rate cut aims to ease borrowing costs and boost economic growth as companies and consumers could refinance loans into lower-rate debt.But it appears unlikely that Americans will enjoy that noticeable lower borrowing costs any time soon.For example, the average 30-year mortgage rate was 6.6% last week, according to mortgage giant Freddie Mac, below the peak of 7.8% reached in October 2023.
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