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Breaking News!
The Federal Reserve cuts interest rates by another 25 basis points!
The stock market cheers, and the bond market follows suit!
The Federal Reserve announced a gentle reduction in the benchmark interest rate by 25 basis points, bringing it to the range of 4.50%-4.75%. This marks the second consecutive rate cut, perfectly aligning with market expectations! The stock market reacted enthusiastically, continuing to rise; meanwhile, the yield on government bonds also narrowed its decline, with the 10-year U.S. Treasury yield only dropping by 6.7 basis points, currently reported at 4.358%.
Revealing the Federal Reserve's policy statement: The economy is progressing steadily, but the road ahead remains shrouded in uncertainty!
In its statement, the Federal Reserve indicated that economic activity continues to expand steadily, although there are signs of easing in the labor market, and while the unemployment rate has risen, it still remains low. Inflation is gradually approaching the 2% target, but it is still slightly above the ideal level. The Federal Reserve stated that it will steadfastly pursue maximum employment and a long-term inflation target of 2%, with the risks to current employment and inflation goals being generally balanced.
However, the economic outlook remains filled with uncertainty! The Federal Reserve is closely monitoring the risks to its dual mandate and has decided to cut rates again to support its goals. At the same time, the Federal Reserve will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. The Federal Reserve reaffirms its strong commitment: to do everything possible to support maximum employment and restore inflation to the target level of 2%.
In the future, how will the Federal Reserve continue to adjust the federal funds rate? How will it balance the various risks in the economy? Let’s stay tuned!
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