SALT LAKE CITY (KUTV) — The Federal Reserve began its two-day meeting Tuesday, with economists widely anticipating a quarter-point interest rate cut — the third since September — bringing the total reduction over that period to one percentage point.

The Fed is expected to announce its decision on interest rates Wednesday afternoon.

Greg McBride, chief financial analyst for Bankrate, said this cut could be the final one for some time.

Since peaking at 9% in 2022, inflation has dropped to 2.7% and has held steady at that level for much of 2024.

While the Fed’s rate cuts have helped ease inflation, further reductions could be risky, McBride explained.

“They want to take their foot off the brake so it doesn’t stall the economy, but at the same time moving slow enough that they don’t let the inflation genie out of the bottle,” he said.

Another factor potentially pausing future cuts is the upcoming presidential transition in January.

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“The Fed probably wants time to observe the economy and policy under a new administration before making more decisions on interest rates,” McBride said.

However, the impact of these cuts may not be immediately felt by Americans struggling with housing affordability.

While the Fed has lowered short-term interest rates, long-term rates — like those tied to mortgages — have continued to climb.

“Mortgage rates march to the beat of a different drummer. They are based on long-term rates, which unfortunately have gone up for the last few months, not down,” McBride said.

Even if mortgage rates were to decrease, experts warn that could spur more demand in the housing market, potentially driving up already high home prices further.

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