September S&P 500 E-Mini futures (ESU24) are up +1.48%, and September Nasdaq 100 E-Mini futures (NQU24) are up +2.03% this morning on expectations the Federal Reserve’s half-percentage-point rate cut will steer the U.S. economy toward a “soft landing,” while investors awaited a new round of U.S. economic data and an earnings report from delivery services giant FedEx.
The Federal Reserve cut its benchmark interest rate by a half percentage point yesterday, marking its first rate reduction in over four years. The Federal Open Market Committee voted 11 to 1 to reduce the federal funds rate to a range of 4.75% to 5.00% after maintaining it at its highest level in two decades for over a year. In their statement, policymakers indicated they will contemplate “additional adjustments” to rates depending on “incoming data, the evolving outlook, and the balance of risks.” At the same time, Fed Chair Jerome Powell warned not to presume that the half-point move establishes a pace that policymakers will maintain. “This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2%,” Powell said in a press conference.
