Federal Reserve Moves Fed Funds Rate Down by 25 Basis Points to a 4.50%-4.75% Range - 2024

The Federal Reserve has ended its November 2024 meeting with a 25 basis points cut.

This cut follows 50 basis point cut in September and the Fed Funds rate now sits 75 basis points below its 5.25 to 5.50% range which marked the high for this cycle.

The pace of Fed cuts is now very much in question following the second election of Donald Trump.  Whereas the Fed was previously focused entirely on incoming inflationary data, it now needs to focus as well on fiscal policy issues - including the possibility that tariffs, deportations and increased deficit spending - may be inflationary.

Even prior to Trump election, all Treasury rates longer than 6 months stood at much higher yields than they had for several months.   It is more clear than before that the Fed's rate cutting efforts to bring rates down to around 2% will play out over quarters or years and not monthly meetings.

Now that the uncertainty of the election is over, we'd expect to see banks become much more competitive with their 1-year CD and 2-year CD offerings, even as the best savings rates may fall.