US Fed’s First Interest Rate Cut in 4 Years: What Global Markets Can Expect | Firstpost Tech & Trade

October 8, 2024 Pharaoh

The US Federal Reserve has made its first interest rate cut since the Covid pandemic, reducing rates by 0.5 percentage points amid concerns over a potential labour market slowdown. The central bank’s Federal Open Market Committee lowered its key borrowing rate to 4.75%-5%, in line with market expectations. This marks the first half-point cut from emergency measures since the 2008 financial crisis. The Federal Reserve noted that while job growth has slowed, economic activity remains strong, and inflation is moving towards its 2% target. This cut is expected to impact not only US markets but also the global economy. Emerging markets, in particular, are eager for relief, as high US interest rates have strained their currencies and increased trade costs. A rate cut could spark capital inflows and strengthen foreign investments worldwide. Let’s explore how.

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