Fed Takes Bold Step: Rate Reduction Stuns Markets
Significant Rate Changes by the Fed
The Fed, the central bank of the États-Unis, has made headlines by reducing rates for the first time since 2020, implementing a sharp cut of half a point. This critical decision comes just weeks ahead of the significant American election scheduled for November 5, pitting Kamala Harris against Donald Trump.
Details of the Decision
- The rate is now set between 4.75% and 5.00%, down from the peak of 5.25% to 5.50%.
- The decision was not unanimous; Governor Michelle Bowman voted for a smaller cut of a quarter point.
- According to the FOMC, confidence in a sustainable drop in inflation towards the target of 2% has been established.
Future Outlook
As inflation trends downward, the Fed aims to prevent the unemployment rate from rising significantly. Further cuts are anticipated, as officials signal an additional half-point reduction by the end of 2024.
Meanwhile, the European Central Bank has also lowered its rates for the second time in three months, indicating broader trends in global monetary policy.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.