Federal Reserve, major decision revealed
Late at night, the Federal Reserve officially released the detailed minutes of the September interest rate meeting. At this meeting, the Federal Reserve decided to cut interest rates by 50 basis points, but this decision was not unanimous. Most members agreed to cut interest rates by 50 basis points, but a few members believed that a 25 basis point cut would be more appropriate. They advocated gradual progress and guided monetary policy back to normal track in a more stable way.
The minutes further pointed out that if inflation steadily moves towards the 2% target and the job market remains strong, the Federal Reserve may adopt a more neutral monetary policy stance in the future.
After the news came out, the U.S. stock market responded quickly, with all stocks in the red, and the S&P 500 index set a new record. At the same time, Chinese stocks also rebounded, and the decline of the Nasdaq China Golden Dragon Index narrowed significantly.
However, the market's expectations for future interest rate cuts by the Federal Reserve have been adjusted. At present, the market generally believes that the Fed is unlikely to cut interest rates in November, and it is expected that the rate cut will be about 47 basis points by the end of 2024, which is lower than before.
In addition, the US CPI data for September will be released soon, and the market expects that the year-on-year growth rate will slow down. At the same time, the US mortgage rate and 10-year Treasury yield are both on the rise.
Some analysts and experts pointed out that given the strong performance of the US economy and the continued pressure of inflation, the Fed may only cut interest rates once more in the rest of the year, and the rate will only be 25 basis points.
In summary, despite the disagreement within the Fed on the issue of rate cuts, the market's overall judgment on the rate cut cycle has not changed fundamentally, which is undoubtedly a positive signal for the stock market. However, the market's expectations for the Fed's future rate cuts have been lowered, and it is expected that the rate cuts will be limited in the short term.
