Fed signals smaller rate cuts in 2025 amid high inflation and trade risks
On December 18, 2024, the FOMC reduced the federal funds rate by 25 basis points to a range of 4.25% to 4.5%, marking its third consecutive cut.
However, more focus was on the committee’s updated monetary policy outlook for the next three years: FOMC members now predict only 50 bps in rate cuts for 2025 — half of September’s estimate — indicating that higher interest rates may persist longer than previously expected.
