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.
๐นU.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.
๐นThough 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 Fedโs decision.
๐นAll but one of the 12 Fed voters supported the cut, which brings the central bankโs 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.
๐นWednesdayโs rate cut is โa welcome developmentโ 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, โthe primary problem in the economy is actually short-term interest rates being too high, so by the Fed cutting rates, itโs actually directly solving the problem,โ he added.
๐ 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.
๐ช 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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