Hey fam, the US Federal Reserve just trimmed its benchmark interest rate by 0.25%, bringing it down to 3.75–4%. 🔽📉 That’s the second cut since mid-Sept and the fifth move since 2024.
Interest rates are like the price of your mobile data pack—when operators slash prices, we all grab extra gigabytes. Lower rates from the Fed mean cheaper loans, so businesses and everyday folks can borrow and spend more. 💸📶
Why the cut? The Fed’s policy-making crew, known as the FOMC, sees the economy growing at a moderate pace. Job growth has slowed a bit, unemployment ticked up, and inflation is still hanging around above target.
Plus, the US government shutdown is now nearing a month, pausing many services and delaying key economic data. This uncertainty adds extra clouds to the outlook. ☁️
On top of the rate cut, the Fed announced it will end quantitative tightening on December 1. QT is just a fancy way of saying the Fed will stop shrinking its bond holdings—think of it as hitting pause on money-supply cuts. 🔍
Analysts at ICBC International warn that the longer a shutdown drags on, the bigger the economic losses, some of which can be permanent. With fiscal policy on hold, the Fed may need to step up its easing game.
The next Fed meetup is in December—will we see another rate cut? Stay tuned for more updates! 📆✨
Reference(s):
US Fed cuts rate again as government shutdown clouds outlook
cgtn.com
