Federal Reserve Cuts Fed Funds Rate by One-Quarter Point
By Tom Burnett CF
On December 18, 2024, the Federal Reserve Open Market Committee (“FOMC”) lowered the Fed Funds rate to 4.25-.50%. In its announcement, the FOMC repeated its goal of returning inflation to the 2% level. The Fed will continue to reduce its balance by not replacing its holdings of Treasury securities and mortgage- backed securities, capped at monthly levels of $25 billion for Treasuries and $35 billion of mortgage-backed securities. The rate cut decision was not unanimous, one Member voted to hold the Funds rate steady with no cut.
The next FOMC meeting will be held on January 29, 2025, followed by the March meeting on March 19, 2025.
Tom Burnett CFA is Director of Research