Fed Now Likely to Slow Rate Cut Pace in 2025
Americans hoping for lower borrowing costs for homes and investments may be disappointed after this week’s Federal Reserve meeting.
Americans hoping for lower borrowing costs for homes and investments may be disappointed after this week’s Federal Reserve meeting.
While home values are cooling off, competition – and prices – could be heating up in the coming months if the Fed’s rate cuts bring out a wave of buyers.
Chair Jerome Powell is slated to speak at the Federal Reserve’s annual, high-profile Jackson Hole conference.
With the end of their two-year fight against inflation in sight, Federal Reserve officials are likely Wednesday to set the stage for the first cut to their key interest rate in four years, a major shift in policy that could eventually lower borrowing costs for U.S. consumers and businesses.
And if inflation starts to heat back up, it’s plausible – though at the moment unlikely – that the Fed will consider ratcheting up rates another 25 basis points.
“If higher inflation does persist,” he said, “we can maintain the current level of [interest rates] for as long as needed.”
Investors and some economists had been holding out the possibility that the Fed might cut as early as its next meeting in March. That now appears off the table.