Fed announces interest rate for December 2024

On December 18, 2024, the Federal Reserve (Fed) reduced interest rates by an additional 0.25 percentage points, bringing the federal funds rate down to a range of 4.25-4.5%. This is the third consecutive cut this year, following reductions of 0.5% and 0.25% in previous months. However, the Fed forecasts a slowdown in the pace of rate cuts in the future, only expecting two more reductions of 0.25 percentage points each in 2025, instead of the four cuts previously anticipated. This decision comes amidst the backdrop of a strong U.S. economy, low unemployment rates, but inflation still exceeding the Fed's 2% target. Some FOMC members opposed the decision to cut interest rates, arguing for the need to wait for more economic data and consider the impact of President-elect Donald Trump's fiscal policy. The Fed also raised its inflation forecast for 2025 to 2.5%, above the 2% target. The stock market and gold prices reacted negatively to this announcement.