Politics
Fed lowers interest rates again but dials back plans for more cuts in the future
WASHINGTON — The Federal Reserve on Wednesday made another cut in interest rates, but dialed back expectations for lowering rates in the near future.
The rate reduction, the third in a row, had been widely expected, but where policymakers go from here is anything but certain.
Plans for several more rate cuts in 2025 have become muddied as progress the Fed made on curbing inflation has stalled and uncertainties abound about what impact the incoming Trump administration will have on the economy.
The Fed’s new quarter-point rate reduction, coming out of its last policy-setting meeting of the year, will give consumers a bit more relief on interest payments for credit cards, home equity lines and some other personal loans.
The cumulative effects of the three rate cuts since September, totaling a full percentage point, are more meaningful and could help households that are stretched financially. More Californians have fallen behind in making debt payments this year, with delinquency rates on credit cards and auto loans rising especially for millennials (ages 28-43), according to the California Policy Lab at UC Berkeley.
The Fed’s recent rate cuts, however, haven’t done a whole lot for potential homebuyers and sellers. The 30-year fixed mortgage rate, while ticking down a little this month, most recently stood at 6.6% last Thursday — which is actually up from about 6% in mid-September, according to Freddie Mac. And analysts don’t see mortgage rates coming down significantly in the near term.
While Wednesday’s rate cut was expected — futures markets gave it a 95% probability before the announcement — the view ahead is clouded by uncertainty over what President-elect Trump might do, on trade as well as fiscal policy.
Trump has talked about cuts in taxes and regulations, which would likely stimulate economic activity. But he also has proposed tariffs on all imports and even higher levies on Chinese goods, which most analysts see as inflationary and a hit to economic growth.
Whether Trump will go through with his tariff threats, and if so, when and by how much, remain highly uncertain.
Beyond questions about the new administration’s intentions, Fed policymakers already had reason to slow their rate-cut plans. The American economy and jobs, while slowing a bit, have kept growing at a solid pace.
At the same time, consumer price inflation, which reached near double digits in the summer of 2022, has recently stopped trending down toward the Fed’s 2% target. Inflation edged up a notch in November, with prices rising 2.7% from a year earlier as consumers paid more for used cars and airline fares, but also staple items like medical care and foods purchased for home. Rising grocery prices, in particular, have gnawed at consumer sentiments, and were seen as a key factor in Trump’s victory in November.
“I think for lower- and moderate-income households, the budgetary battle continues, month in and month out,” said Greg McBride, chief financial analyst at Bankrate.com. “Inflation on everyday necessities continues to be an issue.”
In September, the Fed began its latest rate-cutting scheme by making a big half-point reduction, followed by two quarter-point moves. And based on the trajectory of inflation then, it had forecast four more smaller cuts next year.
But on Wednesday, the Fed’s updated projections showed officials expecting just two quarter-point cuts in 2025 and another two the following year. And analysts say policymakers are likely to pause at their next rate-setting meeting in January.
In their latest projections, most Fed officials said the U.S. economy would grow 2.1% next year, compared with 2.5% this year, which is up significantly from its previous September forecast. They see their preferred measure of core inflation as ending the year at 2.8% and at 2.5% in 2025. The nation’s unemployment rate, which was 4.2% in November, is expected to rise to 4.3% around this time next year.
Wednesday’s announcement takes the Fed benchmark interest rate down to a range of 4.25% to 4.5%. That’s a full percentage point lower than it was in September, but is still considered above the so-called neutral rate that’s neither stimulative nor restrictive for the economy.
Politics
Federal judge blocks Trump from cutting childcare funds to Democratic states over fraud concerns
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A federal judge Friday temporarily blocked the Trump administration from stopping subsidies on childcare programs in five states, including Minnesota, amid allegations of fraud.
U.S. District Judge Arun Subramanian, a Biden appointee, didn’t rule on the legality of the funding freeze, but said the states had met the legal threshold to maintain the “status quo” on funding for at least two weeks while arguments continue.
On Tuesday, the U.S. Department of Health and Human Services (HHS) said it would withhold funds for programs in five Democratic states over fraud concerns.
The programs include the Child Care and Development Fund, the Temporary Assistance for Needy Families program, and the Social Services Block Grant, all of which help needy families.
USDA IMMEDIATELY SUSPENDS ALL FEDERAL FUNDING TO MINNESOTA AMID FRAUD INVESTIGATION
On Tuesday, the U.S. Department of Health and Human Services said it would withhold funds for programs in five Democratic states over fraud concerns. (AP Photo/Jose Luis Magana, File)
“Families who rely on childcare and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” HHS Deputy Secretary Jim O’Neill said in a statement on Tuesday.
The states, which include California, Colorado, Illinois, Minnesota and New York, argued in court filings that the federal government didn’t have the legal right to end the funds and that the new policy is creating “operational chaos” in the states.
U.S. District Judge Arun Subramanian at his nomination hearing in 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
In total, the states said they receive more than $10 billion in federal funding for the programs.
HHS said it had “reason to believe” that the programs were offering funds to people in the country illegally.
‘TIP OF THE ICEBERG’: SENATE REPUBLICANS PRESS GOV WALZ OVER MINNESOTA FRAUD SCANDAL
The table above shows the five states and their social safety net funding for various programs which are being withheld by the Trump administration over allegations of fraud. (AP Digital Embed)
New York Attorney General Letitia James, who is leading the lawsuit, called the ruling a “critical victory for families whose lives have been upended by this administration’s cruelty.”
New York Attorney General Letitia James, who is leading the lawsuit, called the ruling a “critical victory for families whose lives have been upended by this administration’s cruelty.” (Win McNamee/Getty Images)
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Fox News Digital has reached out to HHS for comment.
In what might be the most decisive critique yet of President Trump’s remake of the Kennedy Center, the Washington National Opera’s board approved a resolution on Friday to leave the venue it has occupied since 1971.
“Today, the Washington National Opera announced its decision to seek an amicable early termination of its affiliation agreement with the Kennedy Center and resume operations as a fully independent nonprofit entity,” the company said in a statement to the Associated Press.
Roma Daravi, Kennedy Center’s vice president of public relations, described the relationship with Washington National Opera as “financially challenging.”
“After careful consideration, we have made the difficult decision to part ways with the WNO due to a financially challenging relationship,” Daravi said in a statement. “We believe this represents the best path forward for both organizations and enables us to make responsible choices that support the financial stability and long-term future of the Trump Kennedy Center.”
Kennedy Center President Ambassador Richard Grenell tweeted that the call was made by the Kennedy Center, writing that its leadership had “approached the Opera leadership last year with this idea and they began to be open to it.”
“Having an exclusive relationship has been extremely expensive and limiting in choice and variety,” Grenell wrote. “We have spent millions of dollars to support the Washington Opera’s exclusivity and yet they were still millions of dollars in the hole – and getting worse.”
WNO’s decision to vacate the Kennedy Center’s 2,364-seat Opera House comes amid a wave of artist cancellations that came after the venue’s board voted to rename the center the Donald J. Trump and the John F. Kennedy Memorial Center for the Performing Arts. New signage featuring Trump’s name went up on the building’s exterior just days after the vote while debate raged over whether an official name change could be made without congressional approval.
That same day, Rep. Joyce Beatty (D-Ohio) — an ex officio member of the board — wrote on social media that the vote was not unanimous and that she and others who might have voiced their dissent were muted on the call.
Grenell countered that ex officio members don’t get a vote.
Cancellations soon began to mount — as did Kennedy Center‘s rebukes against the artists who chose not to appear. Jazz drummer Chuck Redd pulled out of his annual Christmas Eve concert; jazz supergroup the Cookers nixed New Year’s Eve shows; New York-based Doug Varone and Dancers dropped out of April performances; and Grammy Award-winning banjo player Béla Fleck wrote on social media that he would no longer play at the venue in February.
WNO’s departure, however, represents a new level of artist defection. The company’s name is synonymous with the Kennedy Center and it has served as an artistic center of gravity for the complex since the building first opened.
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Democratic Rep. Alexandria Ocasio-Cortez is leveling a stunning accusation at Vice President JD Vance amid the national furor over this week’s fatal shooting in Minnesota involving an ICE agent.
“I understand that Vice President Vance believes that shooting a young mother of three in the face three times is an acceptable America that he wants to live in, and I do not,” the four-term federal lawmaker from New York and progressive champion argued as she answered questions on Friday on Capitol Hill from Fox News and other news organizations.
Ocasio-Cortez spoke in the wake of Wednesday’s shooting death of 37-year-old Renee Nicole Good after she confronted ICE agents from inside her car in Minneapolis.
RENEE NICOLE GOOD PART OF ‘ICE WATCH’ GROUP, DHS SOURCES SAY
Members of law enforcement work the scene following a suspected shooting by an ICE agent during federal operations on January 7, 2026, in Minneapolis, Minnesota. (Stephen Maturen/Getty Images)
Video of the incident instantly went viral, and while Democrats have heavily criticized the shooting, the Trump administration is vocally defending the actions of the ICE agent.
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Vance, at a White House briefing on Thursday, charged that “this was an attack on federal law enforcement. This was an attack on law and order.”
“That woman was there to interfere with a legitimate law enforcement operation,” the vice president added. “The president stands with ICE, I stand with ICE, we stand with all of our law enforcement officers.”
And Vance claimed Good was “brainwashed” and suggested she was connected to a “broader, left-wing network.”
Federal sources told Fox News on Friday that Good, who was a mother of three, worked as a Minneapolis-based immigration activist serving as a member of “ICE Watch.”
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Ocasio-Cortez, in responding to Vance’s comments, said, “That is a fundamental difference between Vice President Vance and I. I do not believe that the American people should be assassinated in the street.”
But a spokesperson for the vice president, responding to Ocasio-Cortez’s accusation, told Fox News Digital, “On National Law Enforcement Appreciation Day, AOC made it clear she thinks that radical leftists should be able to mow down ICE officials in broad daylight. She should be ashamed of herself. The Vice President stands with ICE and the brave men and women of law enforcement, and so do the American people.”
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