50 basis points officially opened the easing cycle, and the Fed cut interest rates for the first time in four years.
The intensity was really a bit beyond expectations, because it went directly from 5.25~5.5 to 4.75, that is, it came directly to the beginning of four. Why is it so radical? Because the Fed believes that the control of inflation has been completely grasped. Next, we will almost follow his words to decide whether to cut interest rates or not, just look at employment.
Moreover, the dot plot shows that this year may be reduced by another 50 basis points, at most 100 basis points this year, and at most 1.75 to 2 in a few years. In other words, the Fed's forward interest rate termination target is higher. At the same time, this rate cut also highlights how non-unanimous agreement is.
According to the current economic expectations, this year's GDP growth rate is lowered to 2%, and the PCE inflation expectation has reached 2.3. In fact, the Fed's 50 basis points are still quite exciting, it feels a bit high, but Powell has already argued with the crowd on the scene, and said you don't ask.
The question is that there is no recession! 50 points cannot be used as a paradigm for the next rate cut, because don't look for patterns in our rate cuts, the Fed has the final say, and the position is really hard now.
After the rate cut, I have dozens of response plans
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