The US Federal Reserve cut its target interest rate by 25 basis points today, its third cut of the year, and signaled only a half percentage point of rate cuts next year to avoid any resurgence of inflation.
The Fed's Federal Open Market Committee (FOMC) lowered the federal funds rate to 4.25-4.50pc from the prior range of 4.5-4.75pc. This followed a quarter point reduction in November and a half-point cut made in mid-September, the first cut since 2020.
The Fed penciled in 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents.
