Hello traders everywhere. As expected the Fed cuts rates by 25 basis points to a range of 1.75 - 2.00%. This cut is the second cut that Fed has implemented in 10 years, the first rate cut came back in July when the Fed cut the rate by 25 basis points to a range of 2.0% - 2.25%.
The market was clearly disappointed by the 25 point cut as it was expecting or hoping for a 50 point cut. The S&P 500, DOW and NASDAQ have all headed lower on the day with the NASDAQ leading the way losing -1.0%.
Though the U.S. economy continues growing at a "moderate" rate and the labor market "remains strong," the Fed said in its policy statement that it was cutting rates "in light of the implications of global developments for the economic outlook as well as muted inflation pressures."
With continued growth and strong hiring "the most likely outcomes," the Fed nevertheless cited "uncertainties" about the outlook and pledged to "act as appropriate" to sustain the expansion.
New projections showed policymakers at the median expected rates to stay within the new range through 2020. However, in a sign of ongoing divisions within the Fed, seven of 17 policymakers projected one more quarter-point rate cut in 2019. Continue reading "As Expected The Fed Cuts Rates"