The Federal Reserve has implemented its third consecutive interest rate cut, according to an official statement released today. This latest reduction underscores progress in the ongoing fight against inflation as the nation transitions into a new presidential administration.
The 25-basis-point cut follows similar reductions in November 2024 and September 2024, marking a significant policy shift after nearly four years without rate cuts. The pandemic era brought persistent inflationary pressures, prompting a prolonged period of rate hikes that now appears to be reversing.
With this adjustment, the federal funds rate moves down from 4.50% to 4.25%. While inflation remains slightly above the Fed’s 2% target, it has dropped sharply from its pandemic peak, a 40-year high. Although the immediate economic effects of this latest rate cut may not be apparent, it sets the stage for what many expect to be a continued downward trend in interest rates.
Market analysts anticipate further rate reductions as the Federal Reserve focuses on supporting economic growth. Fed Chair Jerome Powell, speaking earlier this year in Jackson Hole, Wyoming, voiced optimism about the central bank’s success in reining in inflation. His remarks highlighted the Fed’s readiness to pivot from its previously aggressive stance on interest rate hikes.
Looking ahead, experts predict the Fed will cut rates twice in 2025, following the three reductions seen in 2024. “The market has shifted expectations significantly,” noted Bloomberg analyst Manus Cranny. “Next year, we’re likely looking at just two cuts as the Fed adopts a more cautious but steady approach.”
As the Federal Reserve continues its efforts to recalibrate monetary policy, its decisions will likely have far-reaching implications for both the economy and financial markets heading into 2025.
For more news, find me on Twitter Giannis Andreou and subscribe to My channels Youtube and Rumble
What is your opinion on this particular topic? Leave us your comment below! We are always interested in your opinion!
