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Federal Reserve cuts interest rates by 0.25 percentage points, its third reduction this year
The Federal Reserve on Wednesday announced its third consecutive interest rate cut of 2024, reducing its benchmark rate by 0.25 percentage points amid cooling inflation. The central bank has now trimmed rates by 1 percentage point since September, offering relief to Americans carrying credit card balances and other debt.
The Fed lowered the federal funds rate — the interest rate banks charge each other for short-term loans — to a range of 4.25% to 4.5%, down from its previous target range of 4.5% to 4.75%. The decision comes after policymakers slashed rates by 0.5 percentage points in September, followed by a 0.25 percentage point drop in November.
Wednesday’s move marks the Fed’s final interest rate decision prior to President-elect Donald Trump’s Jan. 20 inauguration. While price increases have cooled from their June 2022 peak, opening the door to Fed rate cuts this year, inflation has remained sticky and well above the Fed’s 2% annual target.
Consumer prices in November rose 2.7% on a yearly basis, fueled by elevated housing and food costs. Given that stubborn inflation, many analysts think the Fed is likely to make fewer rate cuts in 2025 amid concerns that could cause the economy to overheat.
At the same time, the Fed has so far defied forecasters’ warnings that its rate hikes could trigger a recession.
“While the Fed’s 2% inflation target has proven elusive so far, it has been successful in bringing inflation down from its highs without derailing an economy that continues to hum along,” noted Joe Gaffoglio, CEO of Mutual of America Capital Management, in an email before the Fed announcement. “However, if inflation continues to stay above target in the new year, the markets may be too optimistic on how many cuts the Fed may deliver.”
The Fed’s first rate meeting of 2025 is scheduled for Jan. 28-29, or after Trump’s inauguration. About eight in 10 economists expect the Fed to hold rates steady at that meeting, according to financial data firm FactSet.
—This is a developing story and will be updated.
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Why are astronauts stuck in space? Here’s how the Boeing Starliner crew ended up on the space station for months.
Two NASA astronauts who flew up to the International Space Station in a Boeing Starliner capsule for a round trip that was supposed to last just over a week will be stuck in space for closer to a year before they can come home. Despite the astronauts’ longer-than-expected stay at the space station, officials have insisted that Suni Williams and Butch Wilmore aren’t stranded in space.
Here’s what we know about the stuck astronauts:
Why are the astronauts stuck in space?
Williams and Wilmore blasted off to the space station in June. Their mission was supposed to take between eight and 10 days, but helium leaks in the capsule’s propulsion system and degraded thrusters, which are important for re-entry, upended plans for bringing the astronauts back to Earth.
“Eight days to eight months or nine months or 10 months, whatever it is, we’re going to do the very best job we can do every single day,” Wilmore told CBS News correspondent Mark Strassmann in September. At the time, they were expected to leave the space station in late February 2025.
The capsule safely returned to Earth in September with no one onboard.
Who are the astronauts who are stuck in space?
Williams turned 59 on the space station in September. She joined NASA in 1998 after serving in the Navy for over a decade, retiring as a captain. As a naval aviator, she logged over 3,000 flight hours in more than 30 different aircraft. At NASA, she had set a record for women with four spacewalks lasting a total of 29 hours, 17 minutes, but it was broken by Peggy Whitson with her fifth spacewalk in 2008.
Wilmore also retired from the Navy as a captain, recording over 8,000 flight hours as a naval aviator. During Operation Desert Storm in Iraq in 1991, Wilmore flew 21 combat missions. He joined NASA in 2000 and accumulated 178 days in space before the Starliner mission. Like Williams, he has also performed four spacewalks, totaling 25 hours, 36 minutes.
Miguel J. Rodriguez Carrillo/AFP via Getty Images
Why did the Boeing Starliner crew go to the International Space Station in the first place?
The June launch was the Starliner’s first piloted test flight. NASA has funded the development of the capsule and SpaceX’s Crew Dragon as the space agency looks to stop using Russian Soyuz flights to transport astronauts to and from the space station.
When will the astronauts be able to return to Earth?
On Tuesday, Dec. 17, NASA announced Williams and Wilmore would return to Earth after the agency’s new SpaceX crew arrives at the space station. That won’t happen until late March at the earliest so NASA and SpaceX can have more time to finish a new Dragon spacecraft for the mission, NASA said.
Have other astronauts been stuck in the International Space Station before?
NASA astronaut Frank Rubio and two cosmonauts’ six-month stay on the space station was unexpectedly extended to a year after their Soyuz ship became disabled. A replacement had to be launched up to the trio so they could return to Earth in 2023.
contributed to this report.
