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Will the Fed cut rates again in December? This is what the experts say

The Federal Reserve cut rates in its last two meetings, and this week, it will announce its last move regarding interest rates for the year 2024.

The Federal Reserve cut rates in its last two meetings, and this week, it will announce its last move regarding interest rates for the year 2024.
Jason ReedREUTERS

The Federal Reserve will be holding its last meeting for the year this week from Dec. 17 to 18, and is set to announce its final decision on interest rates for 2024 on Wednesday, Dec. 18 at 2 p.m. ET.

In September, the central bank implemented the first rate cut reduction in four years, then followed it up with a more conservative 0.2 percentage point cut in November.

Federal Reserve Chair Jerome Powell will hold a press conference at 2:30 p.m. ET after Wednesday’s meeting.

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Will the Fed cut rates again in December? This is what the experts say

Many economists believe the Federal Reserve is likely to cap the year by cutting interest rates for the third consecutive meeting, according to a survey by financial data company FactSet, per CBS News.

Futures markets also say the Fed will announce another quarter percentage point cut on Wednesday, then hold off decreases in January and put the brakes on further cuts for the rest of 2025.

Fed officials have indicated they intend to gradually bring down the key rate of 4.5% to 4.75% to a more neutral 3%.

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The central bank continues to face elevated prices, with overall inflation rising for the second straight month to 2.7% in November. Core prices, which do not include food and energy, also went up for the fourth month in a row.

Some economists say another a rate cut next week could prove to be a mistake because it could lead to more inflation.

Powell however is more optimistic about the economy.

“I don’t see anything in the economy right now that suggests that the likelihood of a downturn is elevated,” he told CBS News.

“You see growth at a solid rate, you see inflation coming down and a labor market that is still at very solid levels,” said Powell.

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