The Federal Reserve lowered its key lending rate by a quarter percentage point, marking the last rate cut for the year. While the move was widely anticipated, the Fed signaled a slower pace of cuts in the coming year as it seeks to manage inflation. The rate reduction brings the target range to between 4.25% and 4.5%. The central bank acknowledged that inflation has made progress towards its 2% goal but remains elevated, citing recent increases in key inflation figures. The Fed also noted easing labor market conditions but pointed to concerns about an unsteady labor market and mixed economic data.
The Federal Reserve on Wednesday slashed its key lending rate by a quarter percentage point for the final time this year — but signaled the pace of cuts will slow in the year ahead as the central bank moves to keep a lid on inflation.
The Fed, however, hinted at uncertainty around inflation after key figures ticked up the past two months, saying inflation has “made progress” toward its 2% but “remains somewhat elevated.
Consumer spending remained relatively unharmed. Retail sales jumped 0.7% in the same month, beating forecasts of 0.6%, and October’s retail sales figure was revised up to 0.5% from 0.4%, according to the Census Bureau.
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