U.S. stocks dipped despite the Federal Reserve’s larger-than-expected interest rate cut aimed at mitigating the economic slowdown. The Fed slashed rates by 0.75 percentage points, a move designed to stimulate borrowing and investment amid concerns about inflation and slower growth. While markets initially responded positively, the gains quickly reversed, signaling investor skepticism over the long-term effectiveness of the policy.
Source:- news 18
The central bank’s aggressive rate cut, the largest since the financial crisis, highlights the delicate balancing act the Fed faces. With inflation still elevated, the Fed must manage both the risk of slowing the economy too much while preventing further price increases. Investors are weighing whether this move will be enough to avoid a potential recession as inflationary pressures and supply chain disruptions continue to challenge the recovery.
Source:- -BBC news
Major indices fell after the announcement, with the S&P 500 losing 1.2%, the Dow Jones Industrial Average down by 0.9%, and the tech-heavy Nasdaq Composite dropping 1.5%. Market volatility has been a recurring theme in recent months, driven by uncertainty over Fed policy, rising interest rates, and global economic conditions.
Despite the rate cut, bond yields climbed, suggesting investors remain concerned about the possibility of a prolonged economic downturn. The yield on the 10-year Treasury note edged up, reflecting growing fears of inflation and uncertainty about future monetary policy moves.
In the coming weeks, markets will continue to closely watch the Fed’s actions and statements, particularly as inflation data and economic reports are released. Investors will be looking for signs of whether the Fed’s strategy can steer the economy through this challenging period without triggering a sharp downturn.
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