The Fed dropped interest rates in September and may make more cuts before the end of the year

Photo illustration of a stack of bills being blown away. (Credit: Photo illustration by Fortune; Original photo by Getty Images)

With inflation steadily headed toward the 2% target, the Fed announced at its November 7th meeting that it would cut interest rates by 0.25 basis points, after dropping the rate by 0.50% on September 18th.

Insight from Michele Raneri, vice president and head of U.S. research and consulting at TransUnion

“A second consecutive cut indicates that the Fed has continued to see positive signs when it comes to inflation and the economy as a whole following its last rate cut. It is anticipated that there will be subsequent cuts as we move into 2025. The hope is that this will continue to stimulate consumer activity in the credit market, particularly when looking at credit products that have been sluggish in recent quarters.

For example, continued rate cuts could begin to drive down mortgage rates which have remained stubbornly high. This may help motivate more potential home buyers who have been holding off due to relatively high mortgage rates. It also could begin to stimulate the refinance market, in particular among those borrowers who have taken out a mortgage recently with a higher interest rate. Similar movement could also potentially be seen in the auto refinance market in the months to come.”