Dec 23, 2024
US Fed Lowers Rates by 25 Basis Points: Key Takeaways
Rate Cut: The Federal Reserve cut its key interest rate by 25 basis points on December 18, 2024, marking the third consecutive reduction
New Rate Range The target range for the overnight borrowing rate is now 4.25%-4.5%, a level not seen since December 2022
2025 Outlook: The Fed revised its forecast, now projecting only two rate cuts next year, down from four previously expected in September
Economic Factors: The decision is driven by a softening labor market and decreasing inflation, aiming to support economic growth
Market Reaction: US stock markets dropped, with the S&P 500, Nasdaq, and Dow all closing lower. The Dow is set for its 10th straight losing day, its longest streak since 1974
Impact on Borrowing: The rate cuts will lower borrowing costs for consumers, affecting credit cards, loans, auto financing, and mortgages
Read More