Federal Reserve cuts key interest rate to 4.25%-4.5%, signals caution on future reductions

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.

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