Market hopes for a more dovish Federal Reserve were somewhat dashed on Thursday after the world’s most important central bank downplayed the need to slash interest rates to prevent an economic slowdown.
While the US central bank lowered the policy rate by a quarter of a point to the range of 4 per cent to 4.25 per cent as widely expected, its projections showed “just” two more 25 basis points reductions this year and one more in 2026. That compares to the massive 150 basis points of rate cuts that the market had priced in before the meeting.
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