#What are the key updates from the Federal Reserve?
The Federal Reserve has officially decreased the federal funds rate by 25 basis points, lowering the target range to between 3.75% and 4%. This decision marks the second rate cut made this year. As a result, stock markets, including the S&P 500 and Nasdaq, experienced a slight uptick of 0.2% in response to this anticipated change.
In the lead-up to the rate cut, cryptocurrencies like Bitcoin and Ethereum hovered at critical levels, with Bitcoin around $111,300 and Ethereum just below $4,000, as traders approached the news with caution.
This recent adjustment follows another 25 basis point cut last month, signaling an ongoing trend. Expectations run high for a probable additional cut of the same magnitude by December, pushing market estimates to an 87% probability of three consecutive reductions by early 2025.
#What does the end of quantitative tightening mean?
Most significantly, the Federal Reserve announced that its program of quantitative tightening will conclude by December 1. This means the reduction of securities holdings will stop, indicating a notable shift toward a more accommodative stance in terms of liquidity. The Federal Reserve remains focused on its dual objectives of maximizing employment and maintaining price stability. Current assessments show that while economic activity is expanding at a moderate pace, inflation remains higher than desired.
Investors and market participants are now keenly awaiting insights from Fed Chair Jerome Powell, who is scheduled to speak shortly. His comments could provide further clarity on the future of the Federal Reserve's monetary policy and its implications for the economy and markets.