Published September 19. 2024 7:59 pm est
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NEWSMOVESMARKETSFOREX ®
- FED cut interest rates by 0.50 bases points to 5 percent
- Inflation has Moderated down from a high of 7% the previous year down to 2.2% as of Aug 2024
- GDP rose at an annual rate of 2.2% during the first half of 2024
- Consumer Spending has been resilient, while investments in equipment and intangible assets has rebounded
- Labor Market has cooled from its previously overheated state
Thursday’s Edition:
U.S. Economy Inflation Pressures cools significantly down to 2.2% Aug 20204 –
On September 18, 2024, the Federal Reserve, led by Chair Jerome Powell, announced a 0.50% bases point reduction in interest rates to 5 percent. This decision was made in response to the growing cooling down of 
inflationary pressures in the economy, as well as the Steady Economic growth within the U.S. economy and strong Gross Domestic Production numbers increasing at an annual rate of 2.0 percent in the first 2 quarters of 2024.
inflationary pressures in the economy, as well as the Steady Economic growth within the U.S. economy and strong Gross Domestic Production numbers increasing at an annual rate of 2.0 percent in the first 2 quarters of 2024.FOMC Lowers Interest Rates Amid Steady Economic Growth
In a notable decision, the Federal Open Market Committee (FOMC) has lowered the target range for the federal funds rate by 0.5 percentage points, bringing it to a new range of 4.75% to 5%.
This move reflects the Committee’s growing confidence in the U.S. economy’s continued expansion and aims to balance growth with inflation control.
Economic Growth and Job Market
Recent reports indicate that the U.S. economy is performing well, with Gross Domestic Product (GDP) increasing at an annual rate of 2.2% in the first half of the year. Indicators suggest that this growth is likely to continue in the current quarter.
While job gains have slowed and the unemployment rate has ticked up slightly, it remains low, signaling a robust labor market. Consumer spending has remained strong, and investment in equipment and intangible assets has improved from last year’s sluggish rates.
However, the housing sector has seen a dip in investment after a strong first quarter. Overall, improving supply conditions have helped maintain healthy demand, supporting the economy’s performance.
Progress on Inflation
Inflation, a key concern for the FOMC, has shown significant improvement. After peaking at 7% last year, it is now estimated at around 2.2% as of August.
This decline suggests that the FOMC’s previous efforts to manage inflation are starting to pay off. The Committee aims for a long-term inflation target of 2%, and the latest indicators give them more confidence that they are moving in the right direction.
Future Policy Outlook
The FOMC is committed to closely monitoring economic data to guide future monetary policy decisions. They are prepared to make adjustments if new risks arise that could impact their goals of maximum employment and controlled inflation.
This ongoing assessment will take into account various factors, such as labor market conditions and inflation expectations. In addition to lowering interest rates, the FOMC plans to continue reducing its holdings of Treasury and agency securities.
This strategy is designed to support job growth and keep inflation on track.
Overall U.S. Economy
Overall, the U.S. economy is showing resilience and making significant progress towards the FOMC’s objectives. The decision to lower interest rates reflects a positive outlook for sustainable growth and inflation management.
As the FOMC navigates the coming months, their careful approach aims to foster a healthy economic environment for consumers and businesses alike.
The coming months will be crucial for the U.S. economy, as the FOMC continues to navigate the balance between fostering growth and keeping inflation in check.
With a focus o monitoring a wide range of economic indicators, the Committee aims to ensure that the progress made so far ca b be sustained, ultimately benefiting American consumer and business alike.
Please be sure to catch all the latest High Impact Major Market moving News Events on the Forex Weekly Economic Events Recap September 17, 2024.
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