ABC News - Fed cuts interest rates, delivering relief for borrowers
US stocks experienced a significant drop, with the Dow Jones falling over a thousand points following the Federal Reserve's announcement of a quarter-point interest rate cut. This marks the third rate cut since September, aimed at providing relief to borrowers despite persistent inflation above the Central Bank's target. The market reacted negatively as the Fed projected fewer rate cuts next year, indicating concerns over stalled inflation progress. Traders expressed disappointment as the Fed's decision suggests higher borrowing costs may persist longer than anticipated. Fed Chair Jerome Powell acknowledged inflation's stubbornness but remains optimistic about the economy's outlook for the next year, despite potential challenges like tariffs under a new administration.
Key Points:
- Dow Jones dropped over 1,000 points after Fed's interest rate cut announcement.
- Federal Reserve cut interest rates by a quarter point, the third cut since September.
- Fed projects fewer rate cuts next year due to stalled inflation progress.
- Higher borrowing costs may persist as the Fed takes a cautious approach.
- Fed Chair Jerome Powell remains optimistic about the economy despite inflation concerns.