US FED Rate Cut
US FED Rate Cut
1) US Fed cuts rates by 25 bps to 4-4.25% as expected, signals two more cuts this year as job risks rise.
2) The US Federal Reserve on Wednesday cut its benchmark interest rate by 25 basis points to a range of 4.00-4.25 percent, as was widely expected. This was the US Fed's first reduction since December 2024 and the first of President Donald Trump’s second term.
3) The Federal Open Market Committee voted 11–1 in favour of the rate cut, with newly appointed Governor Stephen Miran dissenting in support of a deeper half-point cut. Governors Michelle Bowman and Christopher Waller, who had pushed for easing in July, backed the quarter-point reduction this time
4) Job gains slow, unemployment edges up
In its statement, the US Fed said “recent indicators suggest that growth of economic activity moderated in the first half of the year. Job gains have slowed, and the unemployment rate has edged up but remains low. Inflation has moved up and remains somewhat elevated.” It added that “downside risks to employment have risen,” prompting the shift in policy.
5) The Summary of Economic Projections showed policymakers now expect three rate cuts in 2025 -- up from two pencilled in June -- with two more quarter-point reductions this year, and additional moves in 2026 and 2027. Median estimates put underlying inflation at 3.1 percent at the end of 2025, unchanged from June, while growth forecasts were lifted to 1.6 percent in 2025 and 1.8 percent in 2026.
6) Banking Stocks shall be on radar -