BREAKING: Federal Reserve Finally Cut Interest Rates

Federal Reserve meetings usually follow a predictable pattern, but this week’s Federal Open Market Committee (FOMC) gathering was shrouded in uncertainty.

During their two day meeting, the Federal Reserve announced a 0.50% interest rate cut – the first one in the past 4 years.

Up until now, the benchmark rate stood at its highest point in 23 years, after the central bank introduced a flurry of rate hikes to tame the pandemic’s high inflation.

The views on the potential consequences of this rate cut however are mixed. There is a debate going on about whether this cut will have a negative or positive impact on different markets.

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Speaking at the Token 2049 conference on September 18, BitMEX’s Arthur Hayes stated that the rate cut could lead to a crypto market crash.

And he is not the only one who has doubts about the positive impact of the rate cut, not just for crypto, but for the stock market as well.

Additionally, a group of Democratic senators, led by Elizabeth Warren, were pressing Federal Reserve Chair Jerome Powell to implement a significant 0.75% reduction in interest rates to protect the U.S. economy and avoid recession.

On the other hand, Tom Lee from Fundstrat predicted a major stock market rally following the FOMC meeting.

“By itself, one rate cut isn’t a panacea for borrowers grappling with high financing costs and has a minimal impact on the overall household budget,” noted Greg McBride, chief financial analyst at Bankrate. “What will be more significant is the cumulative effect of a series of interest rate cuts over time.”

Alexander Stefanov