Federal Reserve interest rate cut: December 2024 -- how much and what's next for the economy
The Federal Reserve announced a quarter-point cut to its key interest rate Wednesday, an effort to keep what appears to be a steady but cooling economy stable.
The Federal Reserve announced a quarter-point cut to its key interest rate Wednesday, an effort to keep what appears to be a steady but cooling economy stable.
The move, the Fed's third rate cut of the year, reduces the central bank’s target rate to between 4.25% and 4.5%.
In its statement announcing the cut, the Fed now projects just two interest rate cuts for 2025. It said the unemployment rate remains low, while the rate of inflation "remains somewhat elevated." A separate document the Fed released Wednesday now indicates the central bankers don't believe they'll hit their desired 2% inflation target until 2026.
Economists surveyed by Bloomberg had expected three cuts next year on the belief that the economy, and price growth, would have cooled further by now.
Despite the cautious outlook, Fed Chair Jerome Powell sounded an upbeat note on the state of the U.S. economy, especially relative to how other countries have performed.
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