Will The Federal Reserve Keep Lowering Interest Rates?
The Federal Reserve’s December’ cut follows their slow ratcheting down of the federal funds rate that began in September. The rate of inflation has stayed steady into November and December. However, the Federal Reserve has also indicated this year’s final rate cut may be the last one for some time.
The next Fed meeting will come after some possible changes as the new Trump administration takes office on January 20th.
When will the next Federal Reserve meeting be?
The next Federal Reserve meeting will take place on January 28th and 29th in 2025.
However, the Fed is not expected to cut interest rates again in January. The big question is, will the Fed cuts interest rates at the ensuing meeting in March? That all depends on the economic data in January and February.
What will the Federal Reserve do in 2025?
The inflation rate stubbornly staying in place. As a result, the Fed has indicated there will be fewer rate cuts than previously forecasted in 2025. While the Fed is still likely to scale down the borrowing rate from where it currently stands. Rates are currently hovering around 4.25% to 4.50%. Therefore, it may be awhile longer before another rate cut.
With the Fed basing their decisions on the overall economy and inflation, the Trump administration’s policies and their effects will also likely sway where the Fed rate will go.
Some economists also warn that Trump’s promised tariffs and tax cuts will hasten inflation and government debt. However, others predict that Trump’s promise to return manufacturing to the United States will strengthen the economy and the U.S. dollar. Thus, this will encourage the Fed to lower rates once more.