Scott Horsley

All the major stock indexes dropped sharply after the Fed signaled that it may keep interest rates higher for longer than investors had expected. On average, members of the central bank's rate-setting committee now expect rates to fall just half a percentage point in 2025, not the full point they were projecting back in September.

All the major stock indexes dropped sharply after the Fed signaled that it may keep interest rates higher for longer than investors had expected. On average, members of the central bank's rate-setting committee now expect rates to fall just half a percentage point in 2025, not the full point they were projecting back in September.

Inflation has been sticky in recent months, and some of President-elect Donald Trump's policy proposals could push prices higher. Given that, Fed Chairman Jerome Powell says it makes sense to proceed with caution.

Inflation has been sticky in recent months, and some of President-elect Donald Trump's policy proposals could push prices higher. Given that, Fed Chairman Jerome Powell says it makes sense to proceed with caution.

Powell says the U.S. economy continues to perform well, giving the Fed more latitude to take its time in lowering rates. Scott Horsley, NPR News, Washington.

Powell says the U.S. economy continues to perform well, giving the Fed more latitude to take its time in lowering rates. Scott Horsley, NPR News, Washington.

Good morning, Steve.

Good morning, Steve.

Good morning, Steve.

Well, policymakers are expected to lower their benchmark rate by a quarter percentage point this afternoon. That'd be the third rate cut since September. And it would leave interest rates a full percentage point lower than they were back in the summer.

Well, policymakers are expected to lower their benchmark rate by a quarter percentage point this afternoon. That'd be the third rate cut since September. And it would leave interest rates a full percentage point lower than they were back in the summer.

Well, policymakers are expected to lower their benchmark rate by a quarter percentage point this afternoon. That'd be the third rate cut since September. And it would leave interest rates a full percentage point lower than they were back in the summer.

No. Inflation has come down a lot in the last couple of years, but it's still higher than the Fed would like. And in fact, some of the progress we've been seeing on prices appears to have stalled in the last few months. Fed Governor Chris Waller gave a speech earlier this month where he talked about just how stubborn inflation has proven to be.

No. Inflation has come down a lot in the last couple of years, but it's still higher than the Fed would like. And in fact, some of the progress we've been seeing on prices appears to have stalled in the last few months. Fed Governor Chris Waller gave a speech earlier this month where he talked about just how stubborn inflation has proven to be.

No. Inflation has come down a lot in the last couple of years, but it's still higher than the Fed would like. And in fact, some of the progress we've been seeing on prices appears to have stalled in the last few months. Fed Governor Chris Waller gave a speech earlier this month where he talked about just how stubborn inflation has proven to be.

Waller insisted, though, he and his colleagues are not going to let inflation out of the octagon today. until prices are completely under control.

Waller insisted, though, he and his colleagues are not going to let inflation out of the octagon today. until prices are completely under control.

Waller insisted, though, he and his colleagues are not going to let inflation out of the octagon today. until prices are completely under control.

Well, it's a balancing act. High interest rates do help curb inflation, but they can also be a drag on the economy. So the Fed is trying to strike a balance here. Markets are betting the Fed is going to lower interest rates today, and then after that, maybe take a break and see how things play out.

Well, it's a balancing act. High interest rates do help curb inflation, but they can also be a drag on the economy. So the Fed is trying to strike a balance here. Markets are betting the Fed is going to lower interest rates today, and then after that, maybe take a break and see how things play out.