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US Federal Reserve Reduces Rates by 0.25%, Revises Economic Growth Outlook
In a surprise move, the United States Federal Reserve has cut its key interest rate by another 0.25%. This marks a significant shift in the central bank’s stance as policymakers aim to balance economic growth and inflation control. The new rate range now sits between 4.25% and 4.5%, a slower pace of cuts compared to previous announcements.
The move is seen as an attempt to boost demand in the housing market, while also acknowledging the persistent threat of inflation. Despite this, experts warn that high mortgage rates will continue to challenge affordability and slow down homebuying activity.
In a bid to provide clarity on its path forward, the Fed has revised its forecast for future rate cuts. The central bank now expects only two quarter-point reductions in 2025, indicating a cautious approach as it navigates persistent inflationary pressures and economic uncertainty.
The housing market is expected to feel the impact of this decision, with mortgage rates likely to persist at high levels. This will exacerbate affordability issues and potentially slow down homebuying activity. The rate cut aims to boost demand in the sector, but its effectiveness remains uncertain given the prevailing environment.
The Fed’s next rate announcement is scheduled for January 29, 2025, providing further insight into its future policy stance.
Source: cryptonewsland.com
