Headline Roundup • December 18th, 2024
Fed Cuts Rates by Quarter Point, Signals Fewer Cuts in 2025
Summary from the AllSides News Team
The Federal Reserve board announced a reduction of the federal funds rate by a quarter-point. Stocks fell after the board signaled it expects only two cuts next year.
For Context: In September, the Fed cut rates by half a point and signaled it expected to cut rates four times in 2025. A quarter-point cut followed in early November. On Wednesday, Fed officials released new projections showing more persistent inflation that it had expected in September. Fed Chair Jerome Powell said some officials had considered the potential inflationary effect of some of President-elect Donald Trump's policy proposals.
How Bad Was the Stock Fall?: Different articles gave different numbers for the drops in major stock indices. Wall Street Journal (Center bias) reported a 2.6% drop for the Dow, 3% for the S&P 500, and 3.6% for the Nasdaq; ABC News (Lean Left) gave similar numbers. Breitbart (Right) reported the numbers before markets closed and didn't update them later, leaving them at 1.2%, 1.5%, and 2%, respectively. Fox Business (Lean Right) noted a drop "over 1.4%" in the Dow and "over 1.7%" in the S&P 500.
What's Trump Got to Do With It?: WSJ noted early in its article that the Fed expects more inflation because of potential "policy changes by President-elect Donald Trump," pointing to Trump's tariff and deportation proposals. ABC mentioned the Trump connection toward the end of its article and didn't name any specific proposals. Breitbart and Fox Business didn't mention Trump at all.
Featured Coverage of this Story
andrew caballero-reynolds/Agence France-Presse/Getty Images
The Federal Reserve signaled greater doubt over how much it would continue to cut rates after agreeing to a reduction on Wednesday that Chair Jerome Powell conceded had been a close call.
The latest cut, approved by 11 of 12 Fed voters, will lower the Fed’s benchmark federal-funds rate to a range between 4.25% and 4.5%, a two-year low.
Spencer Platt/Getty Images
The stock market plunged on Wednesday after the Federal Reserve scaled back its expectations for interest rate cuts next year.
The Dow Jones Industrial Average fell about 1,100 points, or 2.5%, the largest drop for the index since August. The dip marked the 10th consecutive day of losses for the Dow, its longest losing streak since 1974.
Alex Wong / Getty Images
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...
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