Fed starts rate-cut cycle with jumbo cut, but pace of cuts ahead likely slower
Investing.com -- The Federal Reserve started the rate cutting cycle with a jumbo-sized rate cut on Wednesday, but economist believe a 50 basis point rate cut isn't the new 25bps, expecting a more measure pace of cuts ahead."The Fed did cut its policy rate by a bigger 50bp today, to between 4.75% and 5,00%, but the vote was not unanimous and the new rate projections point to smaller 25bp cuts at the remaining two FOMC meetings this year," Capital Economics in a Wednesday note.
“I don’t think anyone should look at this and say this is the new pace,” Powell said in remarks during the September FOMC press conference that followed the monetary policy decision. Others, however, believe the front-loading of rate cuts may support the Fed in taking a more measured approach to rate cuts.
Economists at Capital Economics agree, saying that they “still expect the fed funds rate to bottom out at between 3.00% and 3.25% in mid-2025.”
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed meeting live updates: Fed lowers interest rates by half point, its first cut since 2020The Federal Reserve slashed interest rates by 50 basis points at the conclusion of its September policy meeting.
Read more »
Fed's Goolsbee: There is an overwhelming Fed consensus for multiple rate cutsFederal Reserve (Fed) Bank of Chicago President Austan Goolsbee noted on Friday that Fed officials are finally beginning to catch up with the broader market's view that the time has come for movement from the US central bank on policy rates, but downplayed discussion of a larger opening cut in September.
Read more »
Fed’s Daly: Fed needs to cut policy rate because inflation is falling, economy is slowingOn Thursday, San Francisco Federal Reserve President Mary Daly said that the “Fed needs to cut policy rate because inflation is falling and the economy is slowing.” Additional comments On size of Sept Fed rate cut, 'we don't know yet'.
Read more »
Time has come to buy dollar, BCA says, ahead of Fed rate-cutting cycleTime has come to buy dollar, BCA says, ahead of Fed rate-cutting cycle
Read more »
USD: The activity data will now be keyFed Chair Jerome Powell used his speech at the Jackson Hole symposium to pre-announce the start of the Fed's easing cycle in September.
Read more »
Why these analysts say the Fed should 'front-load' cuts in potential easing cycleWhy these analysts say the Fed should 'front-load' cuts in potential easing cycle
Read more »