Fed slashes interest rates by a half-point, an aggressive start to its first easing campaign in four years

Published On Sep 18, 2024, 2:00 PM

The Federal Reserve has cut interest rates by half a percentage point in response to indications of a slowing job market and easing inflation. This is the first rate cut since early in the Covid-19 pandemic and aims to stimulate economic growth amid signs of softening labor market conditions. The rate is now set between 4.75% and 5%. The Fed's decision reflects confidence that inflation is nearing its target of 2%, with projections showing further cuts in the future as economic conditions evolve.

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Stock Forecasts

XLFView XLF chart on TradingView

Positive

The rate cut is likely to support consumer spending and borrowing, which can boost economic growth. Sectors such as real estate and consumer discretionary may experience positive momentum as borrowing costs decrease.

JPMView JPM chart on TradingView

Negative

Banking and financial services may face margin pressure due to lower interest rates, which tend to reduce banks' net interest margins.

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