Interest Rate Cuts

Extracted Attributes

• Purpose

  To lower borrowing costs, stimulate economic activity, and increase affordability of large purchases.

• Mechanism

  Control supply of credit to banks and sale of Treasury securities.

• Implemented by

  Central banks, such as the U.S. Federal Reserve (Fed).

• Rates Affected

  Federal funds rate, discount rate, policy interest rate, base interest rate, repo rate, cash rate, benchmark rate.

• Influencing Factors

  Economic indicators (job growth, GDP, inflation), U.S. presidential election.

• Key Committee (U.S.)

  Federal Open Market Committee (FOMC).

• Potential Consequences

  Increased affordability for consumers, lower returns for savers, potential for increased housing activity, impact on global currencies and trade, risk of long-term financial instability and rekindling inflation.

• Current Chairperson (U.S. Fed/FOMC)

  Jerome Powell.

Timeline

• Mortgage rates in the U.S. peaked at nearly 8%. (Source: web_search_results)

  2023-10

• The Bureau of Labor Statistics (BLS) corrected Nonfarm Payrolls downward by 818,000, the largest revision since the Great Recession, signaling a weaker U.S. economy. (Source: related_documents)

  Recent Past

• The Federal Open Market Committee (FOMC) paused its cutting cycle, holding rates steady between 4.25% and 4.5% due to a resilient job market and sticky inflation. (Source: web_search_results)

  January [Recent Year]

• Paraguay cut its Policy Interest Rate to 6.50% (-0.25%). (Source: web_search_results)

  2024-01-19

• Kazakhstan cut its Base Interest Rate to 15.25% (-0.50%). (Source: web_search_results)

  2024-01-19

• Israel cut its Benchmark Rate to 4.50% (-0.25%). (Source: web_search_results)

  2024-01-01

• J.P. Morgan projects a 25bps rate cut by the U.S. Federal Reserve. (Source: web_search_results)

  2024-11 (Projected)

• J.P. Morgan projects a second 25bps rate cut by the U.S. Federal Reserve. (Source: web_search_results)

  2024-12 (Projected)

• J.P. Morgan projects four 25bps rate cuts by the U.S. Federal Reserve, one per quarter, bringing policy rates to 3.5% by the end of the year. (Source: web_search_results)

  2025 (Projected)

• J.P. Morgan Research projects the Fed to cut rates twice, bringing the target range for the policy rate to 3.75–4% by the end of the third quarter. (Source: web_search_results)

  2025-Q3 (Projected)

History of Federal Open Market Committee actions

This is a list of historical rate actions by the United States Federal Open Market Committee (FOMC). The FOMC controls the supply of credit to banks and the sale of treasury securities. The Federal Open Market Committee meets every two months during the fiscal year. At scheduled meetings, the FOMC meets and makes any changes it sees as necessary, notably to the federal funds rate and the discount rate. The committee may also take actions with a less firm target, such as an increasing liquidity by the sale of a set amount of Treasury bonds, or affecting the price of currencies both foreign and domestic by selling dollar reserves (such as during the Mexican peso bailout in 1994). Jerome Powell is the current chairperson of the Federal Reserve and the FOMC.

Web Search Results

• Monetary Decisions - Central Bank Rates

  Image 916Jan 19Image 917 Paraguay cuts Policy Interest Rate to 6.50 % (- 0.25)Image 918Central Bank Image 919Jan 19Image 920 Kazakhstan cuts Base Interest Rate to 15.25 % (- 0.50)Image 921Central Bank Image 922Jan 18Image 923 Costa Rica cuts Policy Rate to 5.75 % (- 0.25)Image 924Central Bank Image 925Jan 11Image 926 Peru cuts Policy Interest Rate to 6.50 % (- 0.25)Image 927Central Bank Image 928Jan 01Image 929 Israel cuts Benchmark Rate to 4.50 % (- 0.25)Image 930Central Bank [...] Image 559Aug 15Image 560 Philippines cuts Key Policy Rate to 6.25 % (- 0.25)Image 561Central Bank Image 562Aug 14Image 563 Namibia cuts Repo Rate to 7.50 % (- 0.25)Image 564Central Bank Image 565Aug 14Image 566 New Zealand cuts Cash Rate to 5.25 % (- 0.25)Image 567Central Bank Image 568Aug 08Image 569 Peru cuts Policy Interest Rate to 5.50 % (- 0.25)Image 570Central Bank Image 571Aug 08Image 572 Mexico cuts Benchmark Rate to 10.75 % (- 0.25)Image 573Central Bank [...] Image 799Mar 21Image 800 Costa Rica cuts Policy Rate to 5.25 % (- 0.50)Image 801Central Bank Image 802Mar 21Image 803 Mexico cuts Benchmark Rate to 11.00 % (- 0.25)Image 804Central Bank Image 805Mar 21Image 806 Paraguay cuts Policy Interest Rate to 6.00 % (- 0.25)Image 807Central Bank Image 808Mar 21Image 809 Moldova cuts Base Rate to 3.75 % (- 0.50)Image 810Central Bank Image 811Mar 21Image 812 Switzerland cuts Policy Rate to 1.50 % (- 0.25)Image 813Central Bank

• How will the rate-cutting cycle impact economic activity and market ...

  3As we’ve written, our baseline view is two more 25bps rate cuts this year, one each in November and December, and four in 2025, one per quarter, which would bring policy rates to 3.5% by the end of next year. There are upside and downside risks to this base-case view, and it may also be impacted by the upcoming U.S. presidential election. [...] Let’s say up front what isn’t likely: We don’t see rate cuts spurring an economic boom right now. Interest rates are important, but they’re far from the only influence on economic activity and market returns. [...] The backdrop as the rate-cutting cycle gets underway is one of lower mortgage rates—down from a peak of nearly 8% in October 2023 to about 6.85% at present. 1The drop in mortgage rates is not large, but at the margin it should help stimulate more housing activity on a go-forward basis. And while we do not see a surge in housing activity coming, the environment continues to bode well for large-cap homebuilder stocks.

• U.S. interest rate cuts effect on the global economy - globalEDGE

  Consumers are going to prosper in several ways. Reduced interest rates on credit and loans can increase theaffordabilityof large-ticket purchases, such as houses, vehicles, and schooling. On the other hand, savers may see lower returns on interest-bearing accounts, which may motivate them to look for other investment alternatives and contribute more money to the stock market or otherendeavors. [...] Other nations, especially those with strong ties to the US economy, are anticipated to be significantly impacted by the ratereduction. For example, changes in the yuan’s value relative to the dollar may affect China's exports. The dollar may depreciate when the Federal Reserve cuts interest rates, which could result in higher prices for Chinese goods on the American market. This could impact China's approach to currency management and trade policyformulation. [...] The European economies are additionally reacting to these developments. This year, two policy rate cuts by the European Central Bank indicate that developed nations are working together to promotegrowth. The Eurozone may see a rise in investment as borrowing becomes more appealing due to reduced interest rates. Better financing terms for growth and innovation initiatives might benefit companies like Airbus and BMW, helping them to fortify their positions in the internationalmarket.

• United States Fed Funds Interest Rate - Trading Economics

  2.8% in the previous month. Meanwhile, labor market data continues to reflect a slowdown, but overall conditions remain robust. Investors are still pricing in a 25bps rate cut in September, with expectations of up to 100bps of easing over the next 12 months. At the same time, President Trump has been intensifying pressure on the Fed to cut rates to 1%. His repeated public criticism of the central bank and threats to dismiss Chair Powell have raised concerns about the erosion of the Fed’s [...] 2025-07-30 Trump Pressures Fed for Deep Rate Cut [...] servicing costs climb toward historic highs. While a lower rate could ease short-term interest payments on the national debt, economists warn it could destabilize the economy and rekindle inflation. Reuters noted the move might offer temporary relief but risk long-term financial instability.more

• What's The Fed's Next Move? | J.P. Morgan Research

  The Federal Open Market Committee (FOMC) paused its cutting cycle at its January meeting, opting instead to hold rates steady between 4.25% and 4.5%. The decision was attributed to a resilient job market and sticky inflation, which point to an economy that’s still in good shape. With the January Consumer Price Index (CPI) report surprising to the upside, could the Fed stay on hold through 2025? When will interest rates go down? [...] With inflation still elevated, J.P. Morgan Research looks for the Fed to hold steady until June before cutting twice, bringing the target range for the policy rate to 3.75–4% by the end of the third quarter of 2025.