Fed Signals Interest Rate Cuts as Inflation Eases

The Federal Reserve, after much anticipation, is enacting a small interest rate cut. This move, while expected, is significant as it signals the Fed`s belief that high inflation is under control. The Fed`s decision to raise rates aggressively to combat inflation, which was triggered by a confluence of factors, negatively impacted consumer sentiment and President Biden`s approval rating. With inflation declining, the focus shifted to when the Fed would pivot to rate cuts. This announcement provides some certainty, potentially boosting consumer confidence and stabilizing markets that have been reactive to every indication of the Fed`s intentions.