Good morning
The Fed cut interest rates by half a percentage point yesterday—the first cut in four years and double the 25 basis points that many expected from the central bank. And yet the markets dipped down, perhaps because of a perceived disconnect between Fed Chair Jerome Powell’s sunny prognosis that “the economy is in good shape” and the committee’s bold action that suggests a possible recession on the horizon.
Whatever the reason, we do know that rates tend to move higher when inflation is a problem and move lower when central bankers want to encourage lending, consumption and job growth. A weakening job market was certainly a factor in yesterday’s cut.
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