On September 18, 2024, the US Federal Reserve cut its benchmark interest rate by 50 basis points, bringing it down to 4.75-5.00%. This marks the first rate cut in four years, signaling a shift from combating inflation to stimulating economic growth.
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- Inflation fell to 2.5% from a peak of 9.1% in June 2022.
- US unemployment rose to 4%, first time since January 2022.
- Markets initially reacted with a weakened US dollar.
- Gold prices hit a record high before stabilizing.
- Indian rupee strengthened to 83.66 against USD.
- Global markets anticipated ripple effects, especially in dollar-pegged economies.
- Consumers will see gradual relief in mortgage and credit card rates.
- Other central banks may follow suit with rate cuts.
- Economists warn of potential risks to global economic growth.
- Fed may continue to cut rates into 2025 to 2026, aiming for long-term stability.
