Biden anticipates further interest rate cuts from Federal Reserves

(MENAFN) US President Joe Biden stated on Thursday that he anticipates further interest rate cuts from the Federal Reserve, emphasizing that the central bank's efforts are still ongoing. He highlighted the significance of the Fed's recent decision to lower interest rates, viewing it as positive news for American consumers. Biden noted that reduced interest rates would lead to lower costs for purchasing homes and vehicles, while also decreasing borrowing expenses, ultimately supporting economic growth.

The President pointed out that consumer inflation in the US peaked at 9.1 percent in June 2022 but has since declined closer to the Federal Reserve's target of 2 percent. He remarked that the rate at which inflation has decreased in the US is faster than in nearly all other advanced economies worldwide. Despite this progress, Biden stressed that the work is far from complete, asserting, "I'm not here to take a victory lap." He indicated that while there has been significant improvement, the ongoing challenges necessitate continued efforts.

Biden clarified that the Fed's decision to lower interest rates should not be seen as a triumphant declaration, but rather as a sign of progress indicating that the economy has entered a new phase in its recovery. He reiterated the importance of these monetary policy adjustments, stating that reducing interest rates will enhance confidence among businesses and encourage further investment for economic expansion. The President's remarks underscore the need for a sustained commitment to fostering economic growth.

On Wednesday, the Federal Reserve implemented a notable 50 basis point cut in interest rates, marking the beginning of an aggressive monetary easing strategy and representing the largest rate reduction in 16 years. The Fed's projections suggested the possibility of two additional 25 basis point cuts by the end of 2024, along with a further 100 basis points in cuts for the following year and an extra 50 basis points for 2026. These anticipated reductions signal a proactive approach by the Fed to stimulate the economy during this crucial recovery period.

MENAFN22092024000045015839ID1108700526