We Begin our report with the Federal Reserve first interest rate cut in four Years Central Bank announced it at Lowered its Benchmark interest rate by Half a percentage Point borrowing costs Will drop for banks and lenders who are Expected to pass the savings on to Businesses and consumers on everything From mortgages to credit cards policy Makers at the FED suggested more rate Cuts could come when they meet again in November and December the FED repeatedly Hiked rates in an effort to curb Inflation which cooled down to 2.5% in August on an annual basis close to the Central bank's 2% Target fed share Jerome pal said their plan has been Working the labor market is actually in Solid condition and Our intention with Our policy move today is to keep it There you can say that about the whole Economy the US economy is in good shape It's growing at a solid Pace inflation Is coming down the labor market is in a Strong pace we want to keep it there all Three major stock indexes Rose a bit After the news but then ended the day Lower the Down Jones dropped nearly 3% Meanwhile the tech heavy NASDAQ and the S&P 500 also recorded losses for more on This I want to bring in Martin bardex He's a senior editor and chief markets Correspondent for the street of Financial news site Martin good to be
With you what's the fed's reasoning we Heard a little bit of it there from fed Share Powell but what's their reasoning For this and and the size of a half Percentage point There it's a head scratcher in some ways John isn't it because I think it's a bit Like asking your parents for a $25 loan All summer long and being turned down And then them changing their mind and Offering you 50 and not really fully Explaining why so I think what we're Looking at now is the fact that as you Suggested inflation has cooled to a Degree that the Federal Reserve is Comfortable that that's going to Continue but they're just seeing a Little bit of blip in the labor market That makes them slightly nervous as a Result they felt well if we're going to Get onto this rate cut cycle now let's Move fast today we still have a lot of Room if we have to adjust and we can be Patient if that's required as well so I Think they wanted to get on with it they Had waited all summer the data was Pointing in that direction and they Delivered markets what they' hoped for Martin bardak senior editor and chief Markets correspondent for the street
