When Will The Fed Lower Interest Rates 2025. In july 2023, the fed raised the fed funds rate to its highest since 2001 and has held it there ever since. Chicago fed president austan goolsbee told the financial times on friday it had been a “good week” for a central bank that has aimed to lower inflation without.

So a full percentage point drop amounts to just $16 a month, or less. The fed raises interest rates to increase borrowing costs for mortgages, credit cards and other types of loans, dampening economic activity and inflation.