The Federal Reserve cut interest rates by a quarter point on Wednesday, bringing the target range to 4.25% to 4.5%. The central bank revised its outlook for rate cuts in 2025, however, indicating that there will be two reductions. That's down from the four forecast in September. Fed Chair Jerome Powell said that the central bank would be looking for progress on inflation, noting, "We have been moving sideways on 12-month inflation."

Consumers are feeling the effects of higher prices, not higher inflation, Powell says

Powell thinks that consumers are feeling the effect of high prices, rather than of high inflation.

"We understand very well that prices went up by a great deal, and people really feel that, and it's prices of food and transportation and heating your home and things like that. So there's tremendous pain in that burst of inflation that was very global," he said. "Now we have inflation itself is way down — but people are still feeling high prices — and that is really what people are feeling."

Powell added that the best solution for this is for the Federal Reserve to continue working to get inflation back down to its target so wages can catch up, ultimately restoring consumers' good feelings about the economy.

— Lisa Kailai Han

Fed is not 'looking for a law change' to own bitcoin, Powell says

Fed Chair Powell said that the central bank is not looking to add bitcoin to its balance sheet.

"We're not allowed to own bitcoin. The Federal Reserve Act says what we can own, and we're not looking for a law change. That's the kind of thing of thing for Congress to consider, but we are not looking for a law change at the Fed," Powell said.

President-elect Donald Trump embraced the crypto industry during his campaign and has entertained the idea of potentially creating a strategic reserve of bitcoin.

— Jesse Pound

The labor market is cooling in a way that doesn't raise concerns, Powell says

Powell said that the Federal Reserve is keeping a close eye on the labor market.

"We do think the labor market is still cooling, by many measures," he said, before caveating: "It's not cooling in a quick [way], or in a way that really raises concerns."

— Lisa Kailai Han

Fed will look for progress on inflation before further cuts

The Federal Reserve will look for further progress on inflation in 2025, given some stickiness in the year-over-year data that is concerning policymakers.

"As we think about further cuts, we're going to be looking for progress on inflation," said Powell, noting, "We have been moving sideways on 12-month inflation."

— Sarah Min

Some FOMC members taking 'preliminary' steps to forecast Trump policies, Powell says

Some FOMC members are starting to game out the potential impact of policy proposals from President-elect Donald Trump, Powell said.

"Some people did take a very preliminary step and start to incorporate highly conditional estimates of economic effects of policies into their forecasts at this meeting, and said so at the meeting. Some people said they didn't do so, and some people didn't say whether they did or not," Powell said.

"So we have people making a bunch of different approaches to that. But some did identify policy uncertainty as one of the reasons for their writing down more uncertainty around inflation," he continued.

The Fed Chair later discussed tariff proposals specifically, saying it was too early to have a "definitive answer" on how they could impact inflation.

— Jesse Pound

Fed's rate cuts next year won't be dependent on today's outcome, Powell says

On Wednesday, Fed Chair Jerome Powell said that any rate cuts the U.S. central bank exercises in 2025 will be based on incoming data — and not the current results.

"I think the actual cuts that we make next year will not be because of anything we wrote down today. We're going to react to data; that's just the general sense of what the committee thinks is likely to be appropriate," he said, when asked about the two quarter-point rate cuts projected for 2025, down from the previous forecast of four reductions.

Powell added: "But as for additional cuts, we're going to be looking for further progress on inflation as well as continued strength in the labor market. And as long as the economy and the labor market are solid, we can be cautious as we consider further cuts."

— Lisa Kailai Han

Powell calls Wednesday's rate cut a 'closer call' but the 'right call'

Fed Chair Jerome Powell called Wednesday's rate-cutting decision a "closer call" but ultimately the right decision for the central bank to seek to achieve its dual mandate.

"I would say today was a closer call, but we decided it was the right call because we thought it was the best decision to foster achievement of both of our goals, maximum employment and price development," Powell said at the press conference.

Powell said moving too slowly and needlessly would undermine economic activity in the labor market, while moving too quickly and needlessly would undermine the Fed's progress on inflation, so the central bank is trying to steer between those two risks.

— Yun Li

Fed can be 'cautious' with rate cuts from here, Powell says

Fed Chair Jerome Powell indicated that the bar for further rate cuts is probably higher for the central bank after Wednesday's move.

"With today's action, we have lowered our policy rate by a full percentage point from its peak, and our policy stance is now significantly less restrictive. We can therefore be more cautious as we consider further adjustments to our policy rate," Powell said.

— Jesse Pound

Fed putting a 'stake in the ground,' says JPMorgan's chief global strategist

David Kelly, JPMorgan's chief global strategist, isn't surprised at the new, lower Federal Reserve protections of two rate cuts in 2025. He believes the central bank is laying the groundwork to have a more cautious approach to monetary easing next year.

"Right now, there is sort of this lull between administrations. I think at some stage there's going to be some pressure on them from the administration to be more easy," Kelly said in an interview with CNBC's "Power Lunch."

"They are trying to put a stake in the ground saying, 'This is what you should expect from us' so they can try to avoid or postpone any fight with the administration next year or in 2026," he added.

— Michelle Fox

Cleveland Fed's Hammack dissents from rate cut decision

The Federal Open Market Committee's decision to cut its benchmark interest rate was not a unanimous one.

The new policy statement says that Cleveland Fed President Beth Hammack voted against the move, instead preferring to keep rates steady. The FOMC also had a dissent at its September meeting, when Fed Governor Michelle Bowman wanted a smaller rate reduction.

This was only the third FOMC meeting for Hammack, who took over at the Cleveland Fed in August after Loretta Mester retired.

— Jesse Pound

Disappointing Fed forecast drags stocks lower

Stocks tumbled on Wednesday and turned negative for the day after the Federal Reserve indicated that fewer rate cuts would be coming in 2025.

The S&P 500 was last down nearly 0.4%, while the Nasdaq Composite lost about 0.4%. The Dow traded roughly 100 points lower, heading for its 10th straight losing day.

—Darla Mercado

Federal Reserve lowers rates by a quarter point

The Federal Reserve cut its key interest rate by a quarter point, in a move that was widely expected by traders.

The reduction brings the Fed's target rate range down to 4.25% to 4.5%.

Investors will be looking through the central bank's summary of economic projections for clues, as well as listening to Fed Chair Jerome Powell's press conference at 2:30 p.m. ET.

Read more about the Fed's rate decision here from CNBC's Jeff Cox.

—Darla Mercado

Where markets stand before the Fed’s decision

Stocks were slightly higher around 1:30 p.m. ET as the Federal Reserve's rate decision approached.

The S&P 500 rose 0.18%, while the Nasdaq Composite gained 0.22%. The Dow Jones Industrial Average was around 133 points higher, or 0.32%.

The U.S. 10-year Treasury note yield was roughly flat on the day at 4.389%. The two-year Treasury note yield was down by about two basis points at 4.219%.

 —Darla Mercado

Look for Fed’s pace on rate cuts to slow in 2025, along with near-term market volatility, UBS says

The Federal Reserve is likely to trim rates by a quarter-point on Wednesday – its third cut in a row – but investors shouldn't expect the central bank to keep the same pace next year, UBS says.

"Overall, we believe investors should anticipate a deceleration in the pace of rate cuts in 2025 and near-term volatility as markets recalibrate the Fed's standpoint," wrote Solita Marcelli chief investment officer Americas for UBS Global Wealth Management in a Wednesday report.

There's a silver lining in that short-term market turbulence, as investors who are under-allocated toward stocks can snap them up, she said.

Investors should also deploy any excess cash they're holding into high quality and diversified fixed income strategies and equity income strategies, she added.

"These can offer income generation and portfolio diversification as lower interest rates will likely erode returns on cash next year," Marcelli said.

 —Darla Mercado

Loan interest rates remain high even as Fed has reduced rates

The Federal Reserve has dialed back interest rates by three-quarters of a point since the end of its September meeting, but borrowers aren't seeing a whole lot of savings just yet.

The rate on a 30-year fixed mortgage is sitting at 6.95% as of the week of Dec. 13, according to MND. That's up from 4.29% during the week of March 11, 2022 – and it's up from 6.12% the week of Sept. 13, 2024. Mortgage rates are tied to the 10-year Treasury note yield, which has climbed this fall.

Credit card rates haven't changed much since the Fed kicked off its rate cuts. They're sitting at 20.35% as of last week, according to Bankrate. That's down from 20.78% in September, but up from 16.34% in March 2022.

Yields on savings have cooled in the past three months, however. The annual percentage yield on a five-year certificate of deposit 2.86% in the week of Dec. 13, according to Haver. That's down slightly from 2.87% in mid-September, but up sharply from 0.50% in March 2022.

 —Darla Mercado, Nick Wells

The 'dot plot' will be a focal point as the Fed concludes its final meeting of 2024

The Federal Reserve is widely expected to cut rates by a quarter point on Wednesday. What's less certain is how it will proceed on rates in the new year and beyond.

While inflation has cooled since the Fed kicked off its rate-hiking campaign in March 2022, the final stretch is proving difficult. The consumer price index reading in November reflected a 12-month inflation rate of 2.7%. It's still far off from the Fed's 2% inflation target.

Stubborn inflation and an economy that remains resilient are leading some on Wall Street to temper their expectations for rate cuts in 2025. December's "dot plot" will give traders a sense of where Fed policymakers see rates heading in the new year.

Read more from CNBC's Jeff Cox on what to expect from the Fed on Wednesday.

 —Darla Mercado