The US Federal Reserve has cut interest rates by half a percentage point, bringing the benchmark rate to 4.75-5%.
This marks the first rate cut since 2020 and signals a significant shift in monetary policy.
Key takeaways for investors:
- Economic Outlook: The Fed aims to maintain economic strength while managing inflation, projecting 2.1% growth for 2024.
- Labor Market: Unemployment is expected to rise slightly to 4.4% by year-end, prompting the Fed's proactive stance.
- Inflation: The Fed anticipates inflation to cool to 2.3% by the end of 2024, approaching their 2% target.
- Future Cuts: More rate reductions are likely, with projections suggesting rates could fall to 3.5% by the end of 2025.
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