Here it comes: FED ANNOUNCE Half-Point (0.5%) INTEREST RATE CUT

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The Federal Reserve lowers rates by 50 basis points, sending stocks higher.

🔹U.S. stocks climbed after the Federal Reserve voted to cut interest rates by 0.5 percentage point, opting for a more aggressive reduction than investors had been expecting just a week ago.

🔹Though traders had anticipated a rate cut, they had been left guessing about the size of the move. A week ago, traders were fairly confident that the Fed would cut by the traditional 0.25 percentage point. That consensus vanished in recent days, with many expecting a larger cut, but there was still a large amount of uncertainty heading into the Fed’s decision.

🔹All but one of the 12 Fed voters supported the cut, which brings the central bank’s benchmark rate to a range between 4.75% and 5%. Most officials anticipate cuts that would lower rates by at least a quarter point each at meetings in November and December, according to quarterly projections.

🔹Wednesday’s rate cut is “a welcome development” and should put the stock market on good footing going forward, said Yung-Yu Ma, chief investment officer at BMO Wealth Management.

Unlike previous years when the Fed has cut rates, “the primary problem in the economy is actually short-term interest rates being too high, so by the Fed cutting rates, it’s actually directly solving the problem,” he added.

📈 U.S. stocks rose

The S&P 500, the Dow and the Nasdaq Composite were all higher.

On Tuesday, stock indexes finished nearly flat, with the S&P 500 and Dow at near-record highs.

🪙 Treasury yields retraced earlier gains.

The yield on the 10-year Treasury note was recently 3.666%, according to Tradeweb, vs. 3.694% just before the Fed announcement and 3.641% Tuesday, its second-lowest closing level of the year.

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