Fed cuts rates by 0.5%, first since 2020

Fed cuts rates by 0.5%, first since 2020
Fed cuts rates by 0.5%, first since 2020

The US central bank (Fed) cut rates for the first time since 2020 on Wednesday, opting directly for a sharp half-percentage point cut, placing them in a range of 4.75 to 5.00%, and is considering an additional half-percentage point cut by the end of 2024.

The Fed said in a statement that it now has “greater confidence” in the decline in inflation. The decision was not taken unanimously, at this last meeting before the American election on November 5, with one governor, Michelle Bowman, voting for a reduction of only a quarter of a point.

Inflation falling faster than expected

The US central bank (Fed) sees inflation slowing faster than expected this year and next, but unemployment rising more than expected, according to its updated forecasts published Wednesday after the meeting of its monetary policy committee.

The Fed revised its inflation forecast downwards to 2.3% at the end of 2024 and 2.1% at the end of 2025, when it had previously forecast 2.6% and 2.3% respectively in June, before returning to the target level of 2.0% in 2026.

Unemployment forecasts have been revised upwards to 4.4% this year and next, compared to 4.0 and 4.2% previously, while gross domestic product (GDP) growth for 2024 is expected at 2.0% compared to 2.1% previously.

-

-

NEXT Revaluation of APL, small pensions, gas prices… Everything that changes on October 1st