Federal Reserve cuts interest rates by another 25 basis points; US markets in the red

Federal Reserve interest rate decision news: The Federal Reserve on Wednesday, December 18, 2024, reduced its key interest rate by 25 basis points, marking the third consecutive cut.

As widely expected by the markets, the Federal Open Market Committee (FOMC) lowered its overnight borrowing rate to a target range of 4.25%-4.5%. This brings rates back to the levels last seen in December 2022, when they were on an upward trajectory.

However, the central bank struck a cautious note on the possibility of further rate reductions in the coming years. The federal funds rate influences borrowing costs for credit cards, loans, auto financing and, more indirectly, mortgages.

The S&P 500 dipped as the Fed indicated fewer rate cuts next year than market expectations. The broad market index fell by 0.1%, while the tech-heavy Nasdaq Composite also dropped by 0.1%. The Dow Jones Industrial Average traded in the red.

For more, follow CNBC-TV18's blog