Expectations for Fed’s interest rate cut
(VOVWORLD) - The US Federal Reserve (Fed) will hold a two-day policy meeting on Wednesday and Thursday to decide whether or not to lower interest rates. American economists and business people have been waiting for months to learn what the Fed will decide.
 Feb headquarters in Washington, DC (Photo: Xinhua/VNA) |
Fed Chair Jerome Powell said last month that the Fed is prepared to cut rates to bolster the job market and achieve a “soft landing”, now that the central bank has managed to curb inflation without tipping the economy into a steep recession and causing unemployment to surge.
The US has maintained interest rates above 5% for more than a year to fight inflation. Economists say the fight against inflation has succeeded and now the Fed needs to bring interest rates back down.
Kathy Bostjancic, chief economist at Nationwide Financial, said a Fed rate cut will lower borrowing costs across the board and give relief to consumers, thus boosting spending.
Many people say they expect the Fed to announce a rate cut of 50 basis points, and Wall Street traders expect at least two more 50 basis point cuts by the end of the year.