The Fed announced its decision: a 25 basis point cut.

Fed's Interest Rate Cut Decision

The Federal Reserve (Fed), after a two-day meeting, cut the policy interest rate by 25 basis points, bringing the interest rate to a range of %3.75-4. It was known that a significant portion of economists was expecting a 25 basis point cut in the Bloomberg survey.

Market Reactions and Recent Data

The Fed had last cut interest rates in September, marking the first rate cut since December of the previous year. However, this decision was made in an environment where critical economic data was not released due to the federal government being closed.

Risks in the Labor Market

Fed Chairman Jerome Powell had highlighted the existing risks in the labor market. He stated that the Federal Open Market Committee (FOMC) was focused on the threats within the labor market and acted according to current conditions.

Inflation Data and Future Expectations

Despite the government being closed, the latest inflation data remained below market expectations. This situation strengthened the possibility of the Fed making a new interest rate cut at the October meeting.

President Trump's Interest Rate Cut Demands

On the other hand, President of the United States Donald Trump has frequently called on Fed Chairman Jerome Powell to make aggressive interest rate cuts to stimulate the economy.

To be continued...