💰 The Federal Reserve has cut its key interest rate in response to a steady decline in previously high inflation, now barely exceeding the 2% target.
📉 Annual inflation has decreased from a peak of 9.1% to a low of 2.4% in September.
🔒 Powell mentioned that the Fed aims to keep reducing its key rate towards a "neutral" level that neither restricts nor stimulates growth.
🇺🇸 Potential White House meddling in Fed policy decisions under a Trump presidency could impact interest rate decisions.
💼 Financial markets have pushed up Treasury yields, increasing borrowing costs throughout the economy despite the Fed’s rate cut.
📈 Trump’s proposed tariff and economic plans are expected to boost inflation, making further rate cuts less likely.
🤷♂️ Despite rate cuts typically leading to lower borrowing costs, high borrowing rates for mortgages, car loans, and major purchases pose a challenge to the Fed’s efforts to support the economy.
💵 The U.S. dollar slightly pared losses after the Federal Reserve cut interest rates by 25 basis points
📉 Dollar index was down 0.49% at 104.59
📈 Euro gained 0.44% to $1.0775
📉 Greenback was down 0.85% at 153.31 Japanese yen
🔑 Federal Reserve cut its main policy rate by 25 basis points due to slower job gains
📉 Markets see fewer rate cuts in 2025 due to Trump’s policies
📊 Rate cuts expected to continue but Powell is cautious about timing
💼 Powell stayed clear of politics and discussed economic outlook for future rate cuts
💬 Markets are now focused on Powell’s comments during the news conference
Federal Reserve Cuts Key Interest Rate
The Federal Reserve has cut its key interest rate in response to a steady decline in previously high inflation, now barely exceeding the 2% target.
Annual inflation has decreased from a peak of 9.1% to a low of 2.4% in September.
Powell mentioned that the Fed aims to keep reducing its key rate towards a "neutral" level that neither restricts nor stimulates growth.
Market Reactions and Economic Impact
Dollar slightly pares losses after Fed rate cut
Dollar index down 0.49%
Euro gained 0.44% to $1.0775
Greenback down 0.85% at 153.31 Japanese yen
Financial markets have pushed up Treasury yields, increasing borrowing costs throughout the economy despite the Fed’s rate cut.
Despite rate cuts typically leading to lower borrowing costs, high borrowing rates for mortgages, car loans, and major purchases pose a challenge to the Fed’s efforts to support the economy.
Political Influence and Future Considerations
Potential White House meddling in Fed policy decisions under a Trump presidency could impact interest rate decisions.
Trump’s proposed tariff and economic plans are expected to boost inflation, making further rate cuts less likely.
Markets see fewer rate cuts in 2025 due to Trump’s policies.
Rate cuts expected to continue but Powell is cautious about timing.
Powell stayed clear of politics and discussed economic outlook for future rate cuts.
Markets are now focused on Powell’s comments during the news conference.