Rate Cut 25-basis-point rate cut to 4.00%-4.25% was implemented in September 2025, marking the first rate cut in 2025. This move was widely expected and aimed to support employment while keeping inflation in check.
Future Projections:- The Fed's Summary of Economic Projections (SEP) shows that policymakers expect the federal funds rate to decline to 3.6% by the end of 2025, 3.4% in 2026, and 3.1% in 2027. This suggests potential for further rate cuts. #FedOfficialsSpeak
The Fed anticipates total PCE inflation to be 3% in 2025, falling to 2.6% in 2026 and 2.1% in 2027. The central bank aims to return inflation to its 2% target.
The Fed projects US GDP growth to be 1.6% in 2025, 1.8% in 2026, and 1.9% in 2027, indicating a moderate growth trajectory. @CZ @BNB Chain
Fed Chair Jerome Powell:-
Risk Management: Powell emphasized that the recent rate cut was a "risk management" move in response to a softening labor market.
Uncertainty:- Powell acknowledged uncertainty surrounding the economic outlook, stating that ,
"it's challenging to know what to do" and that the Fed will proceed on a "meeting-by-meeting" basis. #fed
Labor Market:- The labor market has softened, with job creation running below the break-even rate needed to hold the unemployment rate constant.
Market Reaction:
Stocks:- US stocks showed mixed reactions after the rate cut, with the Dow Jones Industrial Average rising 260.42 points, while the S&P 500 and Nasdaq Composite fell slightly.
Gold:- Gold prices declined after the Fed's rate cut, as the dollar strengthened.
Cryptocurrency:- Bitcoin prices gained after the Fed rate cut, potentially due to increased liquidity in the market .🌈💛
