FED cuts interest rates right after US presidential election

(CPV) – At the policy meeting on November 7, immediately after the US presidential election results, the US Federal Reserve (FED) cut interest rates by 0.25%, further loosening monetary policy in the context of inflation in the world's largest economy continuing to cool down.

FED Chairman Jerome Powell. (Photo: Getty Images)

This is the second interest rate cut by the US Central Bank in 2024. In a statement, the FED said that policymakers in this agency agreed to lower the key lending rate to a range of 4.5% - 4.75%.

The Federal Open Market Committee (FOMC) – the Fed's policy-making body – said that "economic activity grew at a steady pace". In addition, the US job market has eased and inflation is moving towards the 2% target.

This rate cut follows the Fed's move in September this year, when the agency began its monetary policy easing cycle with a decision to cut interest rates sharply by 0.5% and expected more rate cuts this year.

According to records, the inflation index in the US fell to 2.1% in September, while economic growth remained strong.

On November 7, the S&P 500 and Nasdaq Composite indexes set new record highs after the FED decided to cut interest rates. Accordingly, at the end of the trading session on the New York Stock Exchange (USA), the Nasdaq Composite technology index led the increase when it increased 1.5% to a record high of 19,269.46 points. The S&P 500 index increased 0.7% to 5,973.10 points. Meanwhile, the Dow Jones industrial index closed the trading session with 43,729.34 points.

Share prices of tech giants like Meta and Apple rose sharply in this session, helping to boost the stock market's growth.

According to international economic experts, the election of Donald Trump as the 47th President of the United States may impact the agency's plan to adjust interest rates in the coming time, because Mr. Trump's policies of raising import taxes and reducing domestic taxes are forecast to cause inflation to increase again.

However, after the policy meeting, FED Chairman Jerome Powell affirmed that the US presidential election results would not affect the Central Bank's policy decisions in the short term and the FED would continue to implement a 0.25% interest rate cut.

The Fed has another meeting in December 2024. Markets still expect the agency to continue cutting interest rates by another 0.25%.

Mr. Jerome Powell will have an interview with reporters on November 7 (US time), in which he is expected to answer about the impact of Mr. Donald Trump's victory in the recent US presidential election on the country's economy./.

Source: https://dangcongsan.vn/the-gioi/tin-tuc/fed-cat-giam-lai-suat-ngay-sau-bau-cu-tong-thong-my-682663.html