LAST Christmas, the US Federal Reserve gave the stock market a change of heart. This year, to save economists from tears, the central bank is going to do something special – it’s going to pause.
After more than a year of ratcheting up interest rates at every meeting, the Fed finally pivoted from its war on inflation and paused rate hikes in December 2023. Investors, however, had to wait nine months until September this year for a rate cut.
On Wednesday (Dec 18), the Fed is widely expected to cut rates for a third straight meeting, with a likely 25-basis point reduction in its benchmark Fed Funds rate to a range between 4.25 per cent and 4.5 per cent. Fed chair Jerome Powell is also likely to signal a pause in rate cuts.
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