(MENAFN- Investor Ideas) Investorideas ( ), a go-to platform for big investing ideas releases market commentary Quasar Elizundia expert research strategist at Pepperstone.
"During the recent federal Open Market Committee (FOMC) meeting held in September, the U.S. Federal Reserve decided to cut its benchmark interest rate by 50 basis points, setting it within a range of 4.75% to 5%. This cut marked the beginning of a monetary normalization cycle, following the highest interest rates in decades. The decision was primarily justified by a perceived better balance between its inflation and employment objectives, although some recent data suggest that, had the central bank had access to more up-to-date metrics, it might have reconsidered the magnitude of this adjustment.
Prior to the September meeting, the labor market had shown signs of weakening, which led FOMC members to take a more aggressive stance to support the economy. Projections presented during the meeting indicated a slowdown in job creation and a slight increase in the unemployment rate. However, the non-farm payroll (NFP) figures released afterward surprised to the upside, with significant job creation and a reduction in the unemployment rate. While these results could have prompted the Fed to act more cautiously, this data was not available at the time of the decision.
In terms of inflation, the Federal Reserve expressed greater confidence that progress is being made toward its 2% annual target, although it remains above the desired level. The central bank's projections suggest that inflation could continue to decrease gradually, justifying the start of this rate-cutting cycle. Nonetheless, the bank continues to closely monitor labor market conditions, recognizing the importance of this component within its mandates.
The minutes also highlight that the rate cut decision was made to sustain economic growth and prevent further deterioration in employment. The FOMC emphasized the importance of continuing to adjust monetary policy based on incoming data rather than following a predetermined course. Thus, while the Fed has begun to ease its restrictive stance, members noted that any future moves will depend on the evolution of both inflation and the labor market. Additionally, it was noted that the risks to economic activity are tilted to the downside, while inflationary risks are considered relatively neutral.
Finally, the minutes reflect concerns about the risks associated with a potential global economic slowdown and its impact on the United States. In this context, the Federal Reserve will seek to balance its objective of returning to price stability with maximizing employment. As economic conditions normalize, the Fed will adjust its policies gradually, but without losing sight of the challenges that could arise in the coming months."
About Investorideas - Big Investing Ideas
Investorideas is the go-to platform for big investing ideas. From breaking stock news to top-rated investing podcasts, we cover it all. Our original branded content includes podcasts such as Exploring Mining, Cleantech, Crypto Corner, Cannabis News, and the AI Eye. We also create free investor stock directories for sectors including mining, crypto, renewable energy, gaming, biotech, tech, sports and more. Public companies within the sectors we cover can use our news publishing and content creation services to help tell their story to interested investors. Paid content is always disclosed.
Disclaimer/Disclosure: Investorideas is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact management and IR of each company directly regarding specific questions. More disclaimer info: More disclaimer and disclosure info Learn more about publishing your news release and our other news services on the Investorideas newswire /News-Upload/ Global investors must adhere to regulations of each country.
MENAFN09102024000142011025ID1108764507
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.