Fed cuts rates for third time ahead of Christmas holiday

(The Center Square) – The Federal Reserve on Wednesday again cut interest rates, just ahead of the Christmas holiday.

In a 10-3 vote, the central bank lowered its benchmark lending rate by another quarter percentage point, bringing target rates to 3.5% to 3.75%. Wednesday was the Fed’s third consecutive rate cut since September, which marked the beginning of the first cutting cycle since December 2024. For eight months, the Fed held rates steady at 4.25% to 4.5%; at the Federal Open Market Committee’s last three meetings, it has lowered rates by 0.25% each time.

Federal Reserve Chair Jerome Powell said at an economic symposium in August that the central bank weighs multiple economic considerations in its decisions to raise, lower or leave rates unchanged. Lowering rates can stimulate the job market, but it can also spark inflation. Inflation continues to be slightly higher than the Fed’s target of 2% (it’s currently sitting at about 3%), but the labor market has also seen modest and uneven growth.

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