The Federal Reserve announced another key interest rate cut on Dec. 18, 2024. The latest cut lowered the rate by another quarter point. Since September, the Fed has now lowered rates by a full percentage point.
Based on reductions that George Russell, a founding member of the Machinery Advisors Consortium, shared after the first cut in September, dealers can expect to see another $75,000 benefit on a floorplan debt of $30 million. With the 3 cuts in all, that would be a savings of $300,000 in annual interest.
At the same time, it signaled that it expects to reduce rates more slowly in 2025 than it previously thought, largely due to inflation remaining elevated. According to an AP report, the Fed's 19 policymakers project they will cut their benchmark rate by a quarter point just twice in 2025. Back in September they were estimating 4 rate cuts.
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