Jerome Powell and the Federal Reserve's Interest Rate Adjustments Amid Trump's Influence

Wednesday, 18 December 2024, 20:02

Jerome Powell has guided the Federal Reserve to cut interest rates by 0.25 percentage points, shifting the financial landscape as Donald Trump's policies come into play. With projected fewer cuts in 2025, economic forecasts signal potential challenges ahead for borrowers and the market. The latest adjustment is crucial in understanding future federal monetary policy.
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Jerome Powell and the Federal Reserve's Interest Rate Adjustments Amid Trump's Influence

Interest Rates Cut by Jerome Powell

The Federal Reserve on Wednesday announced its third consecutive interest rate cut of 2024, reducing the benchmark rate by 0.25 percentage points amid cooling inflation. The reduction brings the federal funds rate down to a range of 4.25% to 4.5%, following earlier cuts of 0.5 percentage points in September and 0.25 percentage points in November. This decision aims to provide relief for Americans burdened with credit card debt and other loans.

Fewer Rate Cuts in 2025: Implications

However, in a significant shift, the Fed projects only two rate cuts in 2025, a reduction from the previously expected four cuts from its prior economic assessment. The anticipated federal funds rate by 2025 may now reach a median of 3.9%, up from the earlier estimate of 3.4%. In addition, inflation forecasts have increased, projecting a rise to 2.5%, compared to the 2.1% expected in September.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

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