Fed Signals Interest Rate Cut as Inflation Eases

The Federal Reserve, after much anticipation, has announced it will begin cutting interest rates. This decision comes after over a year of rate hikes intended to combat high inflation. The Fed will likely proceed cautiously with these cuts, adjusting the pace based on incoming economic data. While anticipated, this shift is significant as it could positively impact consumer sentiment and further solidify the decline of inflation. The Fed`s aggressive actions, while necessary to control inflation, negatively impacted President Biden`s approval ratings due to the resulting higher borrowing costs for consumers. With inflation showing signs of decline, the focus has shifted to when the Fed would begin cutting rates. This announcement, therefore, provides some certainty to the markets that have been closely watching the Fed`s every move.