The U.S. central bank cut interest rates on Wednesday, as expected, with Federal Reserve Chair Jerome Powell making reference to upcoming economic changes expected under the Trump Administration.
The central bank’s benchmark lending rate changed from 4.25%- 4.5%, a two-year low.
Powell, stated “Inflation expectations remain well-anchored” with “Risks to achieving goals roughly in balance.” He explained, “We think the economy in a real good place and policy too.” Noting, “What’s driving the slower rate-cut path is stronger economic growth and lower unemployment.”
“Core inflation coming down to 2.5% next year, as in projections, would be significant progress.” Powell said, “We also have to think about the labor market, mindful it is gradually cooling.”
“We expect significant policy changes, we need to see what they are and the effects to get a clearer picture.” he concluded.
Powell’s repeated – references to the need for caution sent stock values down today with bond yields surging higher as investor fear rises over how far borrowing costs are likely to fall over the coming year.
By CEO NA Editorial Staff
