Published Dec. 19, 2024 – Jim Tyson, Senior Reporter – Construction Dive
Policymakers reduced the benchmark interest despite signs that their nearly three-year fight to push down inflation to their 2% target has stalled.Dive Brief:
- The Federal Reserve trimmed the main interest rate by a quarter percentage point Wednesday in its third straight reduction since September, while indicating that it may slow the pace of easing in 2025 compared with its prior projection.
- Policymakers cut the federal funds rate to a range between 4.25% and 4.5% after weighing signs of a cooling labor market against data showing robust retail sales, strong economic growth and persistent inflation. In a median forecast, Fed officials estimated that they would reduce the main rate to 3.9% by the end of next year, a half percentage point higher than their September forecast.
- “We are at or near a point at which it will be appropriate to slow the pace of further adjustments,” Fed Chair Jerome Powell said during a press conference. “We have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive,” he said. Cleveland Fed President Beth Hammack cast the sole dissenting vote against the rate cut.