Fed Signals Interest Rate Cut as Inflation Eases

The Federal Reserve, after much anticipation, is finally lowering interest rates. This move, while expected, is significant as it signals the Fed`s confidence in declining inflation. The aggressive rate hikes implemented since March 2022 to combat soaring inflation, triggered by various factors including the pandemic and the war in Ukraine, are now being reversed. While these hikes successfully curbed inflation, they also contributed to a decline in President Biden`s approval ratings due to the resulting economic strain on consumers. The Fed has been cautious about cutting rates prematurely, closely monitoring inflation data to ensure its defeat. This cautious approach has kept investors on edge, with markets reacting to every shred of information about potential rate cuts.