The U.S. begins a rate-cutting cycle: The Federal Reserve announces a 50bp interest rate reduction.

While this cut aligns with CME rate futures expectations, it exceeded predictions from many Wall Street investment banks and marked an “unconventional” start.

Historically, such a 50bp rate cut only occurs during times of economic or market emergencies, such as the dot-com bubble in January 2001, the financial crisis in September 2007, and the COVID-19 pandemic in March 2020. In all three cases, these 50bp cuts were followed by economic recessions.

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