Rate cut is the start of a new Fed era. What comes next?

Published On Sep 16, 2024, 4:00 AM

The Federal Reserve is set to cut interest rates for the first time in four years, lowering them from 5.25%-5.5% to 5.0%-5.25%. This decision marks the end of an aggressive inflation-fighting campaign. Investors speculate about the extent of the cut, with most expecting a 25 basis point cut—though some anticipate a deeper 50 basis point reduction. The overall outlook suggests that the Fed may continue with a series of rate cuts over the next couple of years, which would lower borrowing costs for consumers and businesses alike. Inflation is reportedly decreasing, and there's a focus on the employment market, with jobs growth slowing. Fed Chair Jerome Powell's remarks will guide expectations on future cuts and economic conditions, as many believe there is still a risk of recession due to economic vulnerabilities.