Fed finalizes interest rate issue, stocks "bright red", S&P 500 "evaporates" 178.45 points

On December 18, after a two-day policy meeting, the US Federal Reserve (Fed) decided to cut interest rates for the third consecutive time from September 2024.

The Fed decided to lower interest rates. (Source: Reuters)

Fed policymakers voted 11-1 to cut interest rates by a quarter percentage point, bringing them to a range of 4.25% to 4.50%.

In its post-meeting policy statement, the Fed assessed that US economic activity continued to grow at a solid pace, unemployment remained low and inflation remained high.

The agency also said it would carefully assess input data, prospects and the balance of risks when considering the scope and timing of future policy rate adjustments.

In an economic outlook update released after the meeting, the Fed slightly raised its 2025 US economic growth forecast to 2.1%, while expecting an unemployment rate of 4.3%.

The average inflation forecast by the end of 2025 was raised to 2.5%, from 2.1% in September 2024.

Policymakers also raised their estimate of average long-term interest rates to 3.0%, from the previously forecast 2.9%.

Meanwhile, recent consumer price data has raised concerns that inflation may be stalling above the 2% target, prompting some Fed policymakers to slow the pace of rate cuts.

The US central bank is expected to cut interest rates less next year with about two 0.25 percentage point cuts, bringing the benchmark interest rate to a range of 3.75 - 4.00% by the end of 2025.

* Data from the New York Stock Exchange showed that at the end of the trading session on December 18, the Dow Jones industrial index recorded its biggest decline in more than 4 months when it "evaporated" 1,123.03 points (equivalent to 2.6%) to 42,326.87 points.

The blue-chip index also fell for the 10th consecutive session, marking its longest losing streak since October 1974. The S&P 500 index fell 178.45 points (equivalent to nearly 3%) and closed at 5,872.16 points.

Meanwhile, the Nasdaq Composite Index also fell 716.37 points (nearly 3.6%) to 19,392.69 points. According to market data, this is the biggest one-day drop for this index since July 24.

Source: https://baoquocte.vn/fed-chot-van-de-lai-suat-chung-khoan-do-ruc-sp-500-boc-hoi-17845-diem-297902.html