Fed, big news!
The Fed has made some big moves recently. They may cut interest rates again, and the action may be faster than we thought. Why? Because they found that the US economy and job market may not be as strong as they thought, so they feel the need to stimulate it by cutting interest rates.
Now that the US inflation rate has come down and is not far from their target of 2%, traders are betting that the Fed will cut another 50 basis points in November. At present, this possibility is not small, with a probability of 54%.
Fed official Musallem also said that if the economy really weakens, they may have to speed up the pace of interest rate cuts. He thinks the most important thing now is to relax policies and make the economy more dynamic.
And it's not just the United States. The European Central Bank also seems to be joining the team of interest rate cuts. There are reports that they may cut 50 basis points in December. Now that inflation in the eurozone is also cooling down, their pressure to cut interest rates is not small.
In general, central banks around the world seem to be preparing to cut interest rates to stimulate the economy. However, interest rate cuts are not a panacea. For example, the Bank of Japan cut interest rates before, but because the operation was too sudden, the stock market fell instead. Therefore, everyone is paying close attention to the Fed's actions this time, wanting to see what impact it will have.
