The US Central Bank cut interest rates for the first time in the Joe Biden era, which led to uncertainties about the state of the economy, in the context of inflation and elections knocking on the doors of Americans.
The US Central Bank (FED) decided to cut interest rates for the first time in President Joe Biden’s term, in an economic context marked by Americans’ dissatisfaction with the increasingly high cost of living, writes CNN.
The decision comes after three years of increased government spending under Biden, high demand for goods or problems in supply chains.
Most economists believe a recession is not imminent
The U.S. central bank said the drop actually demonstrates inflation is under control, but also suggests the economy, which is showing signs of stress, needs a boost.
While most economists believe a recession is not imminent, there are concerns about the state of the economy, according to the aforementioned source
The rate cut was followed by skepticism, with some wondering if the central bank had acted too late, given pressure from investors and economists over rising unemployment and signs of a slowing labor market.
Federal Reserve Chairman Jerome Powell said a weakening labor market could speed up interest rate decisions. However, even with this cut, some investors believe that the Central Bank may have reacted a bit late.
The decision to cut interest rates by 0.5 percentage points, taken without unanimity, would do nothing but increase uncertainty about the future direction of monetary policy and investor confidence in the US’s ability to maintain economic growth.
Source: www.descopera.ro
