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Fed Rate Trimmed: What Does It Mean for You?

On Wednesday, the Federal Open Market Committee cut the federal funds rate by 25 basis points to 4.00%-4.25%, marking the Federal Reserve's first rate reduction in 2025.
Slowing labor-market indicators forced the policy shift, as the Federal Open Market Committee prioritized cushioning the weakening labor market over controlling inflation above the 2% target.
The committee showed internal disagreement, with Stephen Miran, new FOMC member, dissenting for a 50 basis point cut, while Elizabeth Renter said, `The dual mandate is always a balancing act`.
Cheaper borrowing should flow through to loans and investments, even as markets dipped briefly and yields on high-yield savings accounts, CDs and interest-bearing checking accounts fall.
The FOMC dot plot indicates more cuts at meetings on Oct. 28 and Dec. 9, with the Fed projecting two cuts later this year and CME Fedwatch showing strong odds.

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