Fed cuts rates for first time since 2020 as rate-cut cycle kicks off
Investing.com -- The Federal Reserve cut interest rates by 50 basis points on Wednesday, and lifted forecasts for further rate cuts this year, as the era of higher of longer rates moves into central bank’s rearview mirror following a prolonged battle against surging inflation.In a sign that voting Fed members are leaning into the rate cutting cycle, Fed members now see the benchmark rate falling to 4.
The most recent measure of core PCE for the 12 months through July was 2.6%, down from a peak of 5.4% in March 2022. In the days leading up to the September meeting, the Fed had faced calls to deliver a larger 50bps rate cut amid growing fears that cooling in the labor market was a sign of economic trouble ahead.
In its latest projections, the Fed lifted its forecast on the neutral rate, to 2.9% from 2.8% previously.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events.
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