Fed Signals Interest Rate Cuts 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, which reached a peak of 9% in June 2022, seem to be working. While inflation has been falling, the Fed waited to ensure its defeat before cutting rates. This period of high inflation and interest rates negatively impacted consumer sentiment and likely contributed to President Biden`s low approval ratings and decision not to seek re-election. The market eagerly awaits the Fed`s next move, closely analyzing inflation data for hints on the pace of future rate cuts.