The Fed has lowered interest rates for the first time in 11 years. This comes as a consequence of several events, including the continuing pressure of the POTUS and the possibility of negative economic repercussions. The Federal Reserve hasn’t lowered these rates since the 2008 recession.
Jerome Powell, chairman of the Fed and leader of this new policy, promised that this sudden drop is one of many efforts to sustain “one of the longest economic expansions in the country’s history”.
Soon after Powell’s announcement, the market started seeing crazy movement on mortgage bonds and treasuries, a natural reaction.
Powell promised to keep a careful look over inflation, the economy and its growth:
“We did a deep dive into US economic activity and global economic activity, and US economic activity has shown resilience. The issue is more on the downside risks and inflation (…) we’re trying to address those (…) going forward, we’re gonna be monitoring those same things: the evolution of trade uncertainty, of global growth of inflation, and the performance of the US economy.”
We’re hoping this rate cut signifies the start of heavy, determined measures to keep our economy in a healthy and growing state.