Hey fam! Big news from Wall Street: On Wednesday, the US Federal Reserve decided to chop its benchmark interest rate by 25 basis points, bringing it down to 3.50-3.75%. That's the third cut in 2025! 📉
At the press conference, Fed Chair Jerome Powell explained this move follows 75 bps of cuts since September and a total of 175 bps since last September. He said the fed funds rate is now roughly in the 'neutral' zone – that sweet spot where rates neither boost nor slow down the economy too much. Powell added that with the rate here, the Fed can hit pause and see how things shake out. 🤔
Powell also highlighted that last year's US tariffs had pushed inflation higher than expected. These rate cuts aim to cool the job market just enough and guide inflation back down to the Fed's 2% target once those tariff effects wear off. 🛳️💸
Meanwhile, US President Donald Trump wasn't shy about chiming in. He tweeted (yes, still tweeting 😅) that the Fed's cut could have been "at least doubled" to supercharge growth. He even dubbed Powell "a stiff" for approving what he called a "rather small" cut. 📱🗣️
What's next? Investors and job seekers will be watching unemployment numbers and price tags at the grocery store to see if these cuts help or if the Fed will need to adjust again. Stay tuned! 🚀
Reference(s):
cgtn.com
