Interest rates moved lower near the end of 2024 as the Federal Reserve cut rates three times, shaving a full percentage point off the federal funds rate since September. In 2025, that trend is likely to continue.
But with inflation still above the Fed’s 2% target, a strong labor market and a new administration, the central bank already indicated that it would move more slowly on rate cuts in the year ahead.
Federal Reserve officials reduced their outlook for expected cuts in 2025 to two from four, assuming quarter-point increments, according to minutes from their December meeting.
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