Saturday, January 11, 2025
HomeWorld NewsAfter the Federal Reserve cuts interest rates for the first time, what’s...

After the Federal Reserve cuts interest rates for the first time, what’s next? | Real Time Headlines

The Marriner S. Eccles Federal Reserve Building in Washington, DC, United States, Thursday, September 12, 2024.

Stephanie Reynold | Bloomberg | Getty Images

This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

“Attempted Assassination”
Republican presidential candidate Trump
safe and sound The FBI said Sunday’s shooting “appears to be an assassination attempt.” U.S. Secret Service officers “shot an active shooter near the property line of a Trump golf course in Florida,” Special Agent Rafael Barros said at a news conference. The suspect has been detained.

Best week of 2024
Friday, S&P 500 Index up 0.54% Nasdaq Index rose 0.65%, both indexes rose Their best week of 2024. this Dow Jones Industrial Average up 0.72%. Technology and semiconductor stocks continued to push U.S. markets higher. At the same time, pan-European Stoxx 600 rose 0.76%closing up 1.09% this week.

China’s economy still struggling
A lot of data Published on Saturday Data from China’s National Bureau of Statistics fell short of expectations. Retail sales rose 2.1% year-on-year in August, below economists’ expectations of 2.5% growth and July’s 2.7% growth. Industrial production grew by 4.5%, down from 5.1% in July and below expectations of 4.8%.

No more discount retailers?
Lowest prices from retailers Shein and Temu impossible again If the Biden administration cracks down on their use of loopholes to avoid paying tariffs. called Tiny holeswhich allows packages worth less than $800 to enter the United States with less scrutiny and no import duties.

(PRO) Investor’s Christmas
Like children waiting for Christmas, the week investors have been waiting for for years is approaching. The Federal Reserve will hold a rate-setting meeting from Tuesday to Wednesday. Rate cuts are expected – the only question is how much. CNBC’s Salamin breaks down How rate cuts affect the S&P 500.

bottom line

Welcome to U.S. Rate Cut Week!

First, let’s review the dramatic course of interest rates over the past two years.

The first time the Federal Reserve raised interest rates this cycle was in March 2022, when it raised interest rates by a quarter of a percentage point, or 25 basis points, bringing the interest rate range to 0.25%-0.5%.

It was the first of several consecutive rate hikes to try to reduce soaring inflation. In subsequent sessions, rates continued to rise, as relentlessly as the passage of time. Additionally, a substantial rate hike of 75 basis points was implemented between 2017 and 2017. June 2022 to November 2022.

Interest rates have remained in the 5.25%-5.5% range for more than a year.

Eventually, this 23-year high number will fall.

One can never be sure of anything in the market. Suppose the market is bullish and a sell-off occurs the next day.

But given that the Fed has so clearly signaled a rate cut, it’s hard to imagine that a rate cut won’t happen.

The only thing unclear is whether the Fed will cut interest rates by 25 or 50 basis points – commentators believe Both side.

What many are not discussing, however, is the policy trajectory following this meeting. As Cat Stevens sang, the first cut is the deepest. In terms of basis points, this interest rate cut may not be significant, but the signal sent to the market is significant.

The trajectory after this cut could change the narrative. how so?

Too much too soon? This means the economy deteriorates rapidly, triggering panic. Too slow and too infrequent? This could depress the economy.

While the Fed likes to reveal its next steps, it is unlikely to spell out the path forward. “Given the uncertainty about the outlook, we doubt we will know much about the policy path,” wrote Aditya Bhave, U.S. economist at Bank of America.

So even though the Federal Reserve has announced its first rate cut, investors should be cautious about what moves they want to take in the future.

– CNBC’s Pia Singh, Hakyung Kim, Brian Evans and Sarah Min contributed to this article.

RELATED ARTICLES

Most Popular

Recent Comments