Federal Reserve Cuts Interest Rates by One-Quarter Point

Second Rate Cut by Fed in 2024

The Federal Open Market Committee (FOMC) cut the federal funds rate by 0.25% following its two-day meeting on November 6 and 7th. The 25 basis-point cut positions the target overnight lending rate between 4.25% and 4.75%. It is the Fed’s second cut since a 50 basis-point cut in September, a move which marked its first rate cut in over four years.

In a news conference following today’s meeting, Federal Reserve Chair Jerome Powell said, “Recent indicators suggest that economic activity has continued to expand at a solid pace. GDP rose at an annual rate of 2.8% in the third quarter, about the same pace as in the second quarter.”

Powell said inflation had moved closer to the Fed’s target of 2%, but core inflation remained elevated.

ConstructConnect Chief Economist Michael Guckes, commenting on today’s move by the Fed, said, “The Fed’s recent and future rate cuts are going to be critical to countering the financial headwinds that have slowed construction lending in recent years.” 

Guckes added, “Commercial Real Estate loan growth over the last year has slowed to a near stop, hurting the ability of building owners and developers to sustain the industry, which has contracted year-to-date.”

On labor market conditions, Chair Powell noted, “conditions remain solid,” referring to the 4.1% unemployment rate in October. Although unemployment was higher than a year ago through October, Powell mentioned it has trended down in the past three months. 

The next scheduled FOMC meeting is December 17-18, 2024.

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Construction Starts Here™ at ConstructConnect, where our mission is to help the construction industry start every project on a solid foundation. A leading provider of software solutions for the preconstruction industry, ConstructConnect empowers commercial construction firms to streamline their workflows and maximize productivity. ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.