The December rate cut was expected. But the Fed also reduced the number of expected rate cuts for 2025.
Some effects of cheaper money won’t be visible until next year, and smaller, more risk-averse businesses may be slower to respond.
The move was more aggressive than the quarter-point rate cut some analysts were expecting.
The Federal Reserve is likely to cut rates when it meets this week. Once Fed officials announce a rate cut, the gears of monetary policy start turning.
Rates hovered around 7% for a good part of this year.
While some investors think it would help the economy and the markets, economists caution against one.
“We want to see strong growth and a strong labor market,” said Federal Reserve Chair Jerome Powell.
The committee that sets interest rates is meeting this week, and the big question is whether — and when — they’ll start cutting.
Do they wait for lower rates in the future or borrow what they need today? It’s a question of cost versus opportunity.
The assumption is that the economy will chug along and that borrowing costs will fall. But they might not. What makes these riskier stocks attractive?
