The Federal Reserve cut its key interest rate again as the election of President Donald Trump creates new uncertainty about future borrowing costs.
The rate cut puts the Fed’s lending rate in a range of 4.5%-4.75%.
It was the second straight decline after the Federal Reserve cut interest rates for the first time in more than four years in September, signaling confidence that rising prices will eventually stabilize.
Forecasters have been expecting borrowing costs to fall further in coming months but warned that Trump’s plans for tax cuts, immigration and tariffs could keep pressure on inflation and push up government borrowing, complicating those bets. .
U.S. debt rates have risen sharply this week, reflecting those concerns.
The Fed’s key interest rate, which charges banks for short-term borrowing, sets the benchmark for lending across the economy, influencing how banks set interest rates on credit cards, mortgages and other loans.
Those borrowing costs have been hovering at their highest levels in two decades after the Federal Reserve quickly raised interest rates in 2022 to combat inflation, raising its key rate to about 5.3%.
The interest rate cut announced on Thursday was in line with market consensus, with the interest rate reduced by 0.25 percentage points.
