The Federal Reserve announced a quarter-percentage-point cut to its benchmark interest rate Dec. 10, lowering the target range to 3.5%-3.75% in a bid to support a softening job market while keeping inflation in check.
The move may make it cheaper for Americans who hold mortgages, have credit card debt, or need to take out or refinance personal loans, NBC News reported.
In a press release announcing the cut, the Federal Open Market Committee (FOMC) said, “Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.”
The rate cut passed on a 9-3 vote, a narrower margin than is typical for Fed decisions, The Hill reported. Fed board member Stephen Miran favored a half-point cut, while Federal Reserve Bank of Chicago President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid advocated holding rates steady, according to the release.
Fed Chair Jerome Powell, speaking at a press conference, sought to downplay divides within the committee. He said members broadly agree on fundamental challenges to the economy but differ on how to best address them.
“Everyone around the table at the FOMC agrees that inflation is too high and we want it to come down and agrees that the labor market has softened and that there’s further risk,” Powell said. “Everyone agrees on that. Where the difference is is how do you weigh those risks and what does your forecast look like?”
He added that the discussions the officials had “are as good as any we’ve had in my 14 years at the Fed. They’re very thoughtful, respectful, and you just have people who have strong views.”
Economic projections released Dec. 10 show inflation – as measured by personal consumption expenditures (PCE) price index – falling from 2.9% this year to 2.4% in 2026, alongside an increase in projected GDP growth from 1.7% to 2.3%.
During the conference, Powell attributed the improved outlook to resilient consumer spending, rapid investment in artificial intelligence (AI) data centers, and a steady rise in productivity since the easing of COVID-19. He added that AI may be boosting worker productivity without reducing the unemployment rate.
The post Federal Reserve approves third rate cut of 2025 appeared first on CatholicVote org.