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- US Federal Reserve lowers interest rates by quarter point as inflation remains a concern
US Federal Reserve lowers interest rates by quarter point as inflation remains a concern
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The Federal Reserve cut its key interest rate by a quarter-point for the third consecutive time. This move was seen as a "hawkish" rate cut, with the Fed estimating that they will only deliver half the policy easing in 2025 that they had previously projected. The Fed's forecasts also showed stronger growth and inflation in 2025. However, this move sent stocks sharply lower, with the Dow Jones industrial average closing down 1,123.04 points, or 2.6%.
In considering the extent and timing of additional adjustments to the target range … the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
I think that the slower pace of cuts for next year really reflects both the higher inflation readings we've had this year, and the expectation inflation will be higher.
From this point forward, it's appropriate to move forward cautiously and look for progress on inflation … from now, we are in place where the risks are in balance.
Honestly, I'm very optimistic about the economy, and we're in a really good place.
I think we're in a good place, but I think from here it's a new phase and we're going to be cautious about further cuts.
While the Fed opted to round out the year with a third consecutive cut, its New Year's resolution appears to be for a more gradual pace of easing.
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sources
perspectives
countries
organizations
- 1.Federal Reserve System
- 2.Dow Jones
- 3.Federal Open Market Committee
- 4.Federal Reserve Bank of Cleveland
- 5.Goldman Sachs
- 6.White House