The Fed just slashed interest rates for the third time this year

The Federal Reserve on Wednesday cut interest rates by a quarter point, the third rate cut since it began to lower borrowing costs in September.

The Federal Reserve on Wednesday cut interest rates by a quarter point, the third rate cut since it began to lower borrowing costs in September. The central bank’s latest move, which wasn’t unanimous, is an attempt to ease pressure on America’s economy from elevated interest rates to preserve the labor market’s health. Cleveland Fed President Beth Hammack was the lone dissenter on Wednesday’s decision, preferring to keep rates at their current levels. The Fed also signaled in its policy statement that it is leaning toward holding rates steady in the future, since inflation remains stubbornly above the central bank’s 2% target. The US economy has also proved remarkably resilient in the face of elevated borrowing costs, giving the Fed some reassurance that it can stand pat without risking any undue economic damage. Fed officials penciled in just two rate cuts for next year, according to their latest forecasts, down from the four they projected in September. Officials also project slightly stronger economic growth, slightly lower unemployment, and for inflation in 2025 to be higher than they previously thought. The projections overall suggest Fed officials expect the US economy next year to be buoyant, with no recession in sight. They expect inflation to reach their target over a longer period than they previously estimated, not touching 2% until 2027.