Divided US Fed effects third rate cut of 2025
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The Federal Reserve's interest-rate cut Wednesday was expected. Here's how the cut may affect homeowners, buyers and even the economy.
The Fed has cut interest rates for the third time in a row at December's meeting. Fed members were the most divided they've been all year.
Despite recent Fed rate cuts, persistent inflation limits upside for BTZ; bond price appreciation likely requires further Fed intervention or lower inflation. BTZ trades at a 4.66% NAV discount, slightly above its long-term average and peer median, suggesting a better entry point may emerge if valuation reverts.
After three consecutive interest rate cuts, investors now confront an uncertain U.S. monetary policy outlook for the year ahead, clouded by persistent inflation, data gaps, and an impending leadership change at the Federal Reserve.
Nonetheless, as Opening Bell Daily readers know, the last 22 times the Fed has lowered rates with the S&P 500 within 2 percent of record highs, stocks have been higher 12 months later 100 percent of the time.
President Trump wants substantially lower borrowing costs, but officials at the central bank appear ready to resist delivering further cuts if the economic backdrop does not warrant it.
Federal Reserve policymakers cut interest rates by 25 basis points for the third straight meeting, though their dot plot projections suggest only one interest rate cut expected in 2026.
Jerome Powell has concluded his news conference following the announcement that the Federal Reserve will cut the country's key lending rate by a quarter point. This is the third reduction this year brings the key interest rate to 3.50% to 3.75%. Powell affirms the Fed's commitment to keeping inflation low and near the Fed's target.