The Federal Reserve (Fed) is anticipated to implement a more gradual reduction in interest rates in 2025 compared to its earlier projections, due to persistent inflation concerns and uncertainties surrounding President-elect Donald Trump's economic policies. Borrowers expecting significant rate reductions might be disappointed as the Fed plans to lower its key short-term rate only twice next year.
Despite being landlocked, Windcrest methodically plans for its future23 minutes agoGet ready for Insider Deals that offer great savings on gift ideas, home essentials and hair care products.FILE - The seal of the Federal Reserve Board is seen at the building in Washington, Dec. 8, 2024. (AP Photo/Jose Luis Magana, File)of the year will likely have consequences for debt, savings, auto loans, mortgages and other forms of borrowing by consumers and businesses.
But with inflation pressures still elevated and with concern that President-elect Donald Trump's policies could fuel inflation, the Fed indicated Wednesday that it's likely to cut rates more gradually in 2025 than it had projected three months ago. The result is that borrowers who have been hoping for much-lower-rate loans could be disappointed. Loan rates may barely budge if the Fed sticks with its plan to cut its key short-term rate only twice next year. “This could be the last cut for a while,” said Jacob Channel, senior economist for LendingTree. “Because the upcoming Trump administration’s policies might cause a resurgence in inflation or otherwise throw the economy off balance, the Fed might choose to take a wait-and-see approach and hold rates steady at their January meeting.” Depending on the specific proposals the Trump administration manages to enact, the Fed could hold off on any additional cuts until March or even later.“Another rate cut is welcome news at the end of a chaotic year, but it ultimately doesn’t amount to much for those with debt,” said Matt Schulz, chief credit analyst at LendingTree. “A quarter-point reduction may knock a dollar or two off your monthly debt payment. It certainly doesn’t change the fact that the best thing cardholders can do in 2025 is to take matters into their own hands when it comes to high interest rates.” The average annual percentage rate on a new credit card offer, according to LendingTree, is 24.43%. In September, it was 24.92
FINANCE FEDERAL RESERVE INTEREST RATES INFLATION ECONOMIE TRUMP ADMINISTRATION
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