Federal Reserve officials on Wednesday will likely signal a slower pace of interest rate cuts next year compared with the past few months, which would mean that Americans might enjoy only slight relief from still-high borrowing costs for mortgages, auto loans and credit cards.
The Fed is set to announce a quarter-point cut to its benchmark rate, from about 4.6% to roughly 4.3%. The latest move would follow a larger-than-usual half-point rate cut in September and a quarter-point reduction in November.
Wednesday's meeting, though, could mark a shift to a new phase in the Fed's policies: Instead of a rate cut at each meeting, the Fed is more likely to cut at every other meeting at most. The central bank's policymakers may signal that they expect to reduce their key rate just two or three times in 2025, rather than the four rate cuts they had envisioned three months ago.
So far, the Fed has explained its moves by describing them as a recalibration of the ultra-high rates that were ...