The US central bank has cut its benchmark rate again as the election of Donald Trump as president raises new uncertainties about the future of borrowing costs.
This cut places the Federal Reserve's interest rate in a range between 4.5% and 4.75%.
It's the second straight cut after the Fed cut rates for the first time in more than four years in September, a sign of confidence that rising prices are finally stabilizing.
Forecasters expected borrowing costs to fall further in coming months, but warned that Trump's plans for tax cuts, immigration and tariffs could keep pressure on the inflation and increase public borrowing, thus complicating these bets.
Interest rates on US debt have already jumped this week, reflecting these concerns.
The Fed's policy rate – what it charges banks for short-term borrowing – provides a benchmark for economy-wide lending, influencing how banks set interest rates for credit cards, mortgages and other loans.
These borrowing costs have reached the highest rates in two decades, after the Fed quickly raised rates in response to inflation in 2022, bringing its benchmark rate to around 5.3%.
The cut announced Thursday, which was widely expected, resulted in a 0.25 percentage point drop in rates.
