Federal Reserve Reduces Interest Rates Amid Economic Optimism
On December 18, 2024, the Federal Reserve announced a 0.25 percentage point reduction in its benchmark interest rate, bringing it to a target range of 4.25%–4.5%.
This marks the third rate cut since September, signaling the Fed's confidence in the U.S. economy's resilience and a commitment to controlling inflation without hindering growth.
The decision was made by the Federal Open Market Committee, with one dissenting vote from Cleveland Fed President Beth Hammack.
The Fed's updated projections indicate a more robust economic outlook, with an estimated growth of 2.5% for 2025 and a steady unemployment rate of 4.3% over the next three years.
However, the central bank has signaled a slower pace of rate cuts in the coming year to ensure inflation remains under control.
This cautious approach comes amid speculation about potential policy changes with President-elect Donald Trump's imminent return to the presidency.
Investors are advised to stay informed about these developments, as they may influence market dynamics in the near future.
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