The Federal Reserve slashed interest rates for the third time in 2024, reducing its benchmark rate by 0.25 percentage points to a range of 4.25% to 4.5% amid cooling inflation. While the Fed predicts only two rate cuts in 2025, down from its previous forecast of four, analysts suggest that stubborn inflation could lead to fewer cuts overall.
The Federal Reserve on Wednesday announced its third consecutive interest rate cut of 2024, reducing its benchmark rate by 0.25 percentage points amid cooling inflation. The central bank has now trimmed rates by 1 percentage point since September, offering relief to Americans carrying credit card balances and other debt.The Fed lowered the federal funds rate — the interest rate banks charge each other for short-term loans — to a range of 4.25% to 4.5%, down from its previous target range of 4.
'While the Fed opted to round out the year with a third consecutive cut, its New Year's resolution appears to be for a more gradual pace of easing,' said Whitney Watson, global co-head and co-chief investment officer of Fixed income and liquidity solutions at Goldman Sachs Asset Management, in an email. 'We expect the Fed to opt to skip a January rate cut, before resuming its easing cycle in March.
FED INTEREST RATES INFLATION ECONOMIC PROJECTIONS 2025
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