Morningstar says that looking ahead into 2025, the Federal Reserve’s rate-cutting will be “shorter and shallower” than previously expected. However, conditions could change, pushing the Fed into a resumption of interest rate hikes, even if seemingly remote.

In mid-December 2024, the Federal Open Market Committee announced a 25-basis-point rate cut, bringing the federal funds rate range from 4.25% to 4.50%, which was expected.

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