Wed Sep 18 05:08:59 UTC 2024: ## US Federal Reserve Poised to Cut Interest Rates for First Time in Years
**New York, September 17, 2024:** The US Federal Reserve is set to announce its first interest rate cut in over four years this Wednesday, marking a shift in monetary policy as the economy shows signs of cooling. The decision comes just under two months before the US presidential election, adding a layer of political sensitivity to the move.
The two-day meeting, concluding on September 18, will see Federal Reserve Chair Jerome Powell address the media during a critical press conference. While experts are confident that Powell will announce rate cuts, the key question remains: how much will the Fed lower the key rates?
Recent statements from senior officials, including Powell himself, suggest that a rate cut is likely this month as inflation continues to move towards the bank’s target of two percent and the labor market cools. However, the Fed will balance this with the dual mandate to ensure both stable prices and maximum sustainable employment.
The debate among policymakers centers on whether to lower rates by 25 or 50 basis points. A 25 basis point cut is seen as the more cautious and prudent option, while a larger 50 basis point cut could offer more support for the labor market but risks reigniting inflation.
The decision comes after a period of aggressive rate hikes in 2022, undertaken in response to surging inflation driven by supply chain issues and the war in Ukraine. The Fed has maintained its key lending rate at a two-decade high of 5.25 to 5.50 percent for the past 14 months.
The potential rate cut has already triggered a positive reaction in global markets, with the Indian stock market experiencing a fresh lifetime high on Tuesday. However, Powell’s comments on inflation and unemployment during the press conference will be closely scrutinized by investors worldwide, as they will shape the mood of global markets in the coming months.
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