Will the Federal Reserve's rate cut truly benefit consumers

The Federal Reserve is expected to indicate a slower pace of interest rate cuts for 2025. A quarter-point reduction may lower the benchmark rate from 4.6% to 4.3%. Future cuts may occur less frequently, with forecasts suggesting two or three cuts next year instead of four. The Fed aims to recalibrate after previous high levels used to control inflation, which fell to 2.3% in October 2024 from 7.2% in June 2022. Despite lower inflation, it remains above the target of 2%. Strong consumer spending supports the economy, yet analysts warn that further reductions might spur excessive inflation. An incoming administration proposes tax cuts and regulatory changes to promote growth, but potential tariffs and mass deportations could increase inflation. Current 30-year mortgage rates are around 6.6%, unlikely to return to the historical low of 3%. The Fed's pace of rate cuts has slowed as they approach a neutral range for economic activity.

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