How to capitalize on the Fed’s final interest rate cut of the year

The Federal Reserve has now cut its key overnight lending rate three times in a row this year. And the effect has been a mixed bag for consumers.

The Federal Reserve has now cut its key overnight lending rate three times in a row this year. And the effect has been a mixed bag for consumers. All in, the fed funds rate, as it’s called, is now down a full percentage point from what had been its highest level in more than two decades. The fed funds rate affects consumer borrowing and saving rates across the US economy, either directly or indirectly. But its downward effect so far has not been very dramatic. That’s a positive for savers and fixed income investors — who still have plenty of opportunities in the coming months to get an inflation-beating return on their money. But it’s not such great news for those with debt. Their borrowing rates haven’t moved down that much. And many Fed watchers expect the pace of rate cuts in 2025 to slow and the size of the cuts, if any, to be modest. The Fed’s latest forecast now projects just two rate cuts for next year, down from the four projected in September.