Interest rates are expected to gradually decrease following the Federal Reserve's first rate cut in four years. In September 2024, the Fed lowered its benchmark rate by 0.5%, signaling a shift from its aggressive rate hikes in recent years to tame inflation. With inflation largely under control, Fed officials are shifting focus toward supporting a cooling job market and stabilizing economic growth.

Analysts expect more rate cuts through 2024 and into 2025, with the Federal Reserve targeting a "neutral" interest rate—one that neither stimulates nor restricts economic growth. This neutral rate is likely to be around 3% to 3.5%, a significant drop from the current levels near 5.25%​

As a result, borrowing costs for consumers and businesses are likely to fall, affecting mortgage rates, credit card interest, and other loans. Some borrowing rates, like those for mortgages, have already begun to decline in anticipation of further cuts​.

However, the pace and size of future cuts will depend on economic conditions, particularly inflation and employment data.