US Fed cuts interest rates by 25 basis points.. in the second cut in 2024

The Federal Reserve (the US central bank) cut interest rates today, Thursday, for the second time in a row in 2024, by 25 basis points, so that they now range between 4.5 and 4.75%.

It is noteworthy that the US Federal Reserve cut its interest rates in September 2024 for the first time since 2020, by 50 basis points, so that they now range between 4.75 and 5%.

Investors are assessing the possibility that Trump’s policies will lead to increased inflation and change the course of the Federal Reserve (the US central bank) regarding interest rates.

The CME FedWatch tool showed that investors are considering a cut of 25 basis points, while there is a probability of approximately 70% for another interest rate cut in December.

Donald Trump’s victory in the US presidential election sent US Treasury yields higher and the dollar stronger on Wednesday, sending benchmark 10-year yields to a four-month high of 4.479%.

In addition, Republicans gained a majority in the Senate and appeared on track to take control of the House of Representatives, paving the way for faster policy implementation.

The US economy has been growing strongly, but employment has been weak, but consumer spending is strong, raising concerns that there is no reason for the Fed to cut borrowing costs, and that cutting them could lead to overheating of the economy and possibly a return to high inflation.