Janice R. Andrews
The US Federal Reserve has lowered its key interest rate once again, setting it between 4.5% and 4.75%. This is the second rate cut in a row, driven by uncertainties surrounding the economic outlook following Donald Trump’s election as president.
The Fed’s 0.25 percentage point cut on Thursday reflects its cautious stance amid potential impacts of Trump’s proposed policies, such as tax cuts, tariffs, and immigration changes. Analysts warn these measures may heighten inflation and raise government borrowing costs.
The Fed’s benchmark rate influences borrowing costs across the economy, affecting rates for mortgages, credit cards, and other loans. After a period of sharp rate increases to counter inflation in 2022, this latest cut suggests a possible shift in approach as the Fed monitors economic stability.
Markets largely expected the cut, though recent jumps in US debt interest rates reveal continued concern over the fiscal landscape under Trump’s policies.
