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Fed delivers 50 basis point rate cut
The Fed reduced its overnight rate to a range of 4.75%-5.00%, and policymakers anticipate an additional half-point cut by year-end.
The Fed projects rates to decline further in 2025 and 2026, settling between 2.75%-3.00%.
The dollar initially weakened after the rate cut but regained strength following Powell's reassurances on inflation and recession concerns.
Gold hit a new high of $2,600 before retreating to $2,547.
Fed aftermath
The dollar fluctuated in volatile trading after the Federal Reserve announced a half-percentage-point interest rate cut on Wednesday, reducing the overnight rate to range of 4.75%-5.00, citing an additional half point rate cut by year end.
According to the dot plot, the Fed projects further reductions in 2025, with the rate falling by a full percentage point, and another half-point decrease in 2026, eventually settling in the 2.75%-3.00% range.
Initially, the dollar weakened following the Fed’s announcement but regained ground after Fed Chair Jerome Powell's press conference where he also reassured the markets that inflation is on its course toward declining towards the central banks 2% target.
He also eased concerns about a potential recession, stating, "I don't see anything in the economy right now that suggests the likelihood of a recession," Powell remarked.
Gold prices took center stage after reaching a new all-time high of $2,600 before swiftly retreating to $2,547.
In Asia, most Asian stocks gained in volatile trading on Thursday, buoyed by optimism over the Federal Reserve's substantial interest rate cut. Meanwhile, Japanese markets saw a strong rally as the yen weakened ahead of a Bank of Japan meeting.
The S&P 500 ended its seven-day winning streak in volatile overnight trading, slipping 0.3%. Both the Nasdaq Composite and the Dow Jones Industrial Average also dropped 0.3%, with the Dow shedding 103 points. While stocks initially surged after the rate cut announcement, they experienced sharp fluctuations and eventually closed the session in the red.
