In a historic move, the US Federal Reserve has lowered its policy rate by 50 basis points, now set at 4.75-5.00%. This decision, passed with an 11-1 vote, marks a significant shift in monetary policy amidst ongoing fluctuations in inflation and risk balances.
Michelle Bowman stood alone in her call for a more modest 25 basis point cut, but the majority favored a bolder approach. This is the first reduction since 2020, when rates plummeted to combat the economic fallout of the pandemic.
Since March 2022, the Fed has hiked rates a staggering 11 times, totaling 525 basis points, as inflation soared to a peak of 9% in June 2022. However, with recent inflation figures cooling to 2.5% in August, the Fed is signaling a potential pivot in strategy.
Get ready for the ripple effects across the markets! What does this mean for stocks, crypto, and consumer spending? The financial landscape is shiftingâstay tuned for more updates!