Federal Reserve expected to lower interest rates in last meeting of 2024

The Federal Reserve is expected to make it cheaper to borrow money Wednesday as central bankers prepare to wrap up their final meeting of the year.The Fed has been raising rates to force down inflation, though price growth has hovered closer to 3% since last year. The number is down from a more than 7% peak a few years ago but higher than the Fed’s 2% inflation goal.In an attempt to bring down inflation further, federal regulators are likely to continue lowering interest rates that have been at their highest level in decades. That means smaller and fewer rate cuts in 2025 as long as the job market remains steady and unemployment low.In the meantime, it will be more expensive to borrow money to buy a house, car, or carry a credit card balance.President-elect Donald Trump’s economic policies could also pose an impact to inflation. A joint House and Senate committee will hold a hearing Wednesday to examine the impact of tariffs.Meanwhile, central bankers say they need more details to assess the impact of Trump’s economic plan.Companies normally pass on added costs from tariffs to their customers. His proposed tax cuts would likely fuel spending and a large deportation of migrant workers could mean less production. All these things might mean more money chasing after fewer goods, which causes inflation.If tax cuts aren’t paid for, as Trump and Republicans did previously, it could add to the deficit – a major concern for the Federal Reserve.Trump and the GOP argue while tax rates might be lower, they will collect more of them because of the growing economy.