Federal Reserve cuts interest rates by quarter point in December

foxbusiness.com:

Heritage Research fellow and economist EJ Antoni joins ‘The Big Money Show’ to discuss reports the Federal Reserve is likely to cut rates for the third time this year.

The Federal Reserve on Wednesday announced its third straight interest rate cut, lowering the benchmark rate by 25 basis points amid economic data showing that inflation remains above the central bank's target rate.

With the 25-basis-point cut, the benchmark federal funds rate will sit at a range of 4.25% to 4.5%. The Fed's move follows a 25-basis-point cut in November and a larger-than-normal cut of 50 basis points at its September meeting, which was the first reduction in rates since March 2020 and brought them down from a range of 5.25% to 5.5% — the highest level since 2001.

The Federal Open Market Committee (FOMC), the group within the Fed responsible for setting monetary policy, said in a statement that «labor market conditions have generally eased, and the unemployment rate has moved up but remains low» and while inflation has progressed toward the 2% objective, it «remains somewhat elevated.»

«The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate,» the FOMC added.

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Fed Chair Jerome Powell on Wednesday announced the central bank is lowering interest rates by 25 basis points. (Alex Wong / Getty Images)

One member of the FOMC, Cleveland Fed President Beth Hammack, dissented from the decision to cut rates and