The Federal Reserve lowered interest rates by a quarter percentage point on Wednesday, marking its third consecutive cut as President Trump prepares to take office next month.
The reduction brings the central bank’s benchmark interest rate to a range of 4.25% to 4.5%, still historically high despite recent decreases totaling one percentage point over the past several months. The benchmark rate influences borrowing costs for loans such as credit cards and mortgages.
The move, in line with market expectations, could be the Fed’s last rate cut for some time, experts suggest. Persistent inflation may prompt central bankers to hold rates steady as they work to control price increases. Consumer prices rose 2.7% in November compared to the previous year, marking two straight months of accelerating inflation, according to government data.
The recent uptick has reversed some progress made earlier this year when price increases approached the Fed’s 2% target.
Amid these developments, Trump has proposed giving the president a role in setting interest rates, a sharp departure from the Fed’s tradition.
