THE Federal Reserve has cut interest rates by a quarter point on Wednesday, making borrowing cheaper for millions of American consumers.
The quarter-point rate cut brings down the Fed’s target rate to between 4.25% and 4.5%.
The Federal Reserve cut interest rates by a quarter percentage point in December[/caption]
Experts say the rate cut will make borrowing cheaper[/caption]
The move marks the third time the central bank has cut rates this year, with the cut widely expected among economists and investors.
Inflation is sitting just above the bank’s 2% target, after heating up again in November.
Consumer prices were up 2.7% in the 12 months to November according to data released last week, which was a notch above the 2.6% pace of growth seen the previous month.
Federal Reserve chairman Jerome Powell is expected to address the media following the rate cut at 2.30pm, as the central bank seeks to bring inflation under control while not destabilizing the job market.
With inflation ticking up slightly in November, Fed officials have been sounding less optimistic about it cooling.
Some economists think officials may reduce how many rate cuts they expect to make next year in light of strong economic growth and sticky inflation.
Investors and consumers will also be listening closely to comments made by Powell explaining how the central bank plans to tame inflation and keep the job market stable.
Experts say the rate cut is good news for borrowers including those with credit cards, home equity and other loans.
It marks the third consecutive cut since September, meaning rates have dropped a full percentage point.
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