The Federal Reserve announced a small cut to the interest rate benchmark Wednesday. The new benchmark will range from 4.25 percent to 4.5 percent, making borrowing slightly cheaper and providing a mild stimulus to the economy.
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As inflation has abated, the benchmark interest rate has come down by a full percentage point this year. In the press conference following the Wednesday announcement, Jerome Powell, chairman of the Federal Reserve Board of Governors, said that they expect rate cuts to proceed slowly in 2025.
“It’s kind of common sense that when the path is uncertain, you go a little bit slower,” he said.
After large declines from a high of 9 percent in 2022, the U.S. annual inflation rate has settled in close to 3 percent, near the target 2 percent rate but still higher than the central bank’s goal.
