Wed Sep 18 18:27:55 UTC 2024: ## Fed Cuts Rates by Half a Percentage Point, Signaling More Eases to Come

**New York, September 18:** The Federal Reserve on Wednesday cut interest rates by 50 basis points, marking the first rate reduction in over four years. The move, expected by most economists, comes as inflation has cooled and the job market shows signs of weakness. The Fed’s decision to cut rates aggressively reflects their commitment to steering the economy towards a “soft landing” – a scenario where inflation is brought under control without triggering a recession.

The decision to cut rates by half a percentage point was not unanimous. Fed Governor Michelle Bowman dissented, advocating for a smaller, quarter-point cut. This marks the first dissent since June 2022 and the first time a Fed governor has dissented since September 2005.

The Fed’s “dot plot” – which shows individual policymakers’ projections for interest rates – suggests that the median official expects rates to fall by a full percentage point by year-end. This implies two more quarter-point cuts or one larger, half-point cut.

For 2025, the median rate forecast falls to 3.4% from 4.1% in June, hinting at four additional quarter-point rate cuts next year.

The Fed’s decision is expected to have a significant impact on the Indian market. As the US Federal Reserve takes the lead in cutting rates, the Reserve Bank of India (RBI) is likely to follow suit, making rate-sensitive stocks a focal point for investors.

The stock market reacted cautiously to the Fed’s announcement. The S&P 500 was little changed, while the Nasdaq 100, the Dow Jones Industrial Average and the Russell 2000 also saw minimal movement. However, Treasury yields rose across the curve, indicating that investors are still uncertain about the future direction of interest rates.

The Fed’s rate cuts will be closely watched by market participants and economists in the coming months. The central bank’s next meeting is scheduled for November, when it will provide further insight into its plans for the economy.

**Note:** This news article summarizes the key points of the provided text, focusing on the Fed’s rate cut decision and its potential implications. It uses a journalistic style and avoids excessive technical jargon.

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