Amerika Posted on 2025-12-31 11:05:00

The FED will lower interest rates in 2026 - It is expected to see the performance of the American economy

From Dorian Koça

The FED will lower interest rates in 2026 - It is expected to see the

The US Federal Reserve is signaling that there will be further interest rate cuts, but it will first suspend successive cuts to give officials more time to assess how the US economy will perform early next year.

The Federal Reserve released its official minutes of its two-day meeting on Dec. 9-10, in which policymakers debated whether to adjust interest rates. Officials on the Federal Open Market Committee ultimately voted 9-3 to cut borrowing costs by half a percentage point, bringing the federal funds rate to between 3.5% and 3.75%.

However, the minutes showed that policymakers were divided over the pace of additional interest rate cuts. Inflation remains high due to tariffs weighing on the U.S. economy, but that has also been accompanied by a weakening labor market. Federal Reserve officials are divided over which development to promote with their interest rate tools.

Lower interest rates tend to boost economic activity, while higher rates are likely to stifle inflation. Federal Reserve officials are signaling two rate cuts over two years, which would bring overall borrowing costs to 3%.

After the Federal Reserve meeting ended earlier this month, Federal Reserve Chairman Jerome Powell said the central bank would take a "wait and see" approach to lowering borrowing costs. Powell's term expires in May 2026.

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