A 50bp cut is the Fed admitting they're behind the curve again. Waiting this long to acknowledge the labor market cracks means the next few prints are going to look ugly no matter what they do now.
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Core PCE is still running above target though. Cutting into that is how you end up re-accelerating inflation and having to hike again in six months, which is worse for everyone.
Agree with Dana. Two people on my team got laid off last month and the "official" numbers still look fine. The lag on this data is the whole problem.
Bond market had this priced in three weeks ago. The equities "reaction" this morning is just algos trading the headline, not new information.
My mortgage refi finally pencils out again. Small win for once.
Congrats, but the same cut that helps your refi is part of why rent in this city hasn't come down in three years. Depends which side of the asset you're on.
Dumb question maybe but does this mean my savings account APY is about to drop? Literally just moved everything into a HYSA last month lol
Not a dumb question — yes, online savings APYs usually follow the fed funds rate down within a billing cycle or two. Won't crater overnight but lock in a CD now if the rate matters to you.
Every rate decision is just the Fed managing a business cycle they helped create by holding rates near zero for a decade. At some point people should question why seven unelected people get to set the price of money for the entire country.
Covered three FOMC cycles as a reporter. The "just let the market set rates" version of this argument sounds great until you remember what discretion-free monetary policy did in 1929 and 2008. Someone has to be able to move fast.
Genuinely doubt most people reading this article could tell you what the fed funds rate actually controls. Not a knock on anyone, just don't think financial coverage does a great job explaining the mechanism before jumping to the reaction.
To be fair the explainer graphic halfway down this one is actually pretty good. First time I've seen the transmission mechanism drawn out simply.