The Federal Reserve continued its rate-cutting campaign Wednesday, Dec. 18, marking the third cut of 2024. The central bank shaved off another 25 basis points from its benchmark rate, in line with expectations.
The latest decision sets the benchmark interest rate between 4.25% and 4.5%, down from 4.5% and 4.75%. The rate sat above 5% for more than a year between 2023 and 2024 while the Fed attempted to get a hold of rampant inflation brought on by the COVID-19 pandemic aftermath.
The central bank has a dual mandate of maintaining price stability and full employment.
But price stability is starting to go back in the wrong direction. Consumer price inflation rose 2.7% annually in November, after dropping to a 2.4% annual rate in September. Monthly prices rose 0.3% from October, according to the Bureau of Labor Statistics.
Meanwhile, The U.S. jobs market beat expectations in November, adding 227,000 jobs after a bleak October report driven by hurricanes and strikes. However, the unemployment rate ticked up to 4.2%.
The Fed’s decision comes just over a month before President Joe Biden leaves office. President-elect Donald Trump has been critical of Fed Chair Jerome Powell in the past but has publicly stated he will not try to fire him before his term ends in 2026.
