Cold water for investors after a quarter point cut by the Fed, as Chairman Powell hints at fewer cuts in 2025
Posted By RichC on December 18, 2024
The Federal Reserve is less sure about how much it’ll keep cutting rates after agreeing to a reduction this Wednesday afternoon. Chair Jerome Powell admitted that the decision was a close call (see WSJ and rate chart from 2000-2024 below).
The latest cut, approved by 11 out of 12 Fed voters, will lower the Fed’s benchmark federal-funds rate to a range between 4.25% and 4.5%, which is a two-year low.
Investors, traders and the stock market responded with disappointment as they love cheaper money and keeping businesses growing and consumers spending. A lower cost of borrowing sounds great until inflation reappears and debt levels rise (and don’t even get me start on our Federal government’s spending level — insane!)
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