The US Federal Reserve cut interest rates by 50 basis points, the first cut by the world's most important central bank in four years.
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The Federal Reserve kept observers guessing about the size of the rate cut until the last minute.
Although the Fed's moves are often somewhat predictable, there is a great deal of uncertainty surrounding the final decision.
More than $55 million has been bet on a Fed rate cut on crypto prediction market PolyMarket.
The odds of a 50 basis point rate cut rose sharply earlier this week, to above 50%. However, those odds fell sharply on Wednesday.
The Federal Reserve began a long rate hike cycle in 2022 to curb runaway inflation. This hawkish cycle will continue through July 2023.
It is worth noting that the European Central Bank (ECB) has already cut interest rates several times this year due to the decline in inflation in the euro zone. Some economists believe that the Federal Reserve is late in starting to cut interest rates.
While speculation about a Fed rate cut has dominated headlines in recent weeks, JPMorgan CEO Jamie Dimon has downplayed the Fed’s move. He claimed the central bank’s decision would have little impact, suggesting investors should focus on the “real economy.”
