💰 On Wednesday, the Federal Open Market Committee trimmed its benchmark interest rate by 25 basis points, setting it to a 3.75–4% range. This marks the second cut since mid-September and the fifth since last fall.
🔍 The Fed sees the economy expanding at a moderate pace: job growth has slowed, unemployment ticked up, and inflation remains elevated after picking up earlier this year. With uncertainties running high, the central bank decided to ease up again.
📉 Beyond interest rates, the Fed also announced it will pause the reduction of its bond and mortgage-backed securities holdings—known as quantitative tightening—starting December 1, keeping support in place.
⏳ This policy move comes against the backdrop of a government shutdown entering its fourth week. Key economic data releases are delayed, and an ICBC International analysis warns that longer shutdowns can cause larger, lasting economic losses.
🤝 The budget deadlock complicates the Fed’s mission: without fiscal action, monetary policy must work harder. Analysts now expect the Fed to quicken its easing cycle in both timing and tools to counter rising risks.
🔮 Eyes are on December’s meeting: will there be another rate cut? Investors, young professionals, and all of us watching closely as the US grapples with shutdown standoffs and uneven recovery. Stay tuned! 📊
Reference(s):
US Fed cuts rate again as government shutdown clouds outlook
cgtn.com
