Weigh! The Fed Cuts Interest Rates For The Third Time. Big Reversal In Financial Markets

30, local time, the Federal Reserve announced The federal funds rate target interval will be reduced by 25 basis points, reaching the level of 1.5% to 1.75%. 。 This is the third time the Fed has cut interest rates this year, which is in line with market expectations.

One

The Federal Reserve announced the third rate cut this year.

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After the end of the monetary policy meeting, the Fed issued a statement saying that since September, information shows that US economic activity has maintained moderate expansion and household expenditure has grown strongly. But investment in fixed assets and exports remain weak. The overall inflation rate and the core inflation rate after excluding food and energy prices are still below the target of 2%.

The statement said that taking into account the impact of the global situation on the US economic outlook and moderate inflationary pressures, The Fed decided to cut interest rates, but the outlook for the US economy is still uncertain. While assessing the appropriate rate path, the Fed will continue to observe the impact of the future situation on the US economic outlook.

Federal Reserve Chairman Powell We have decided to cut interest rates for the third time this year. We take this step to keep the US economy strong in the context of the current global economic development and provide some protection for continuing risks.

Federal Reserve Chairman Powell said at a news conference the same day, at present, the Fed's monetary policy stance may be appropriate, but if the future economic data lead to the Fed's assessment of the economic outlook of the United States substantial changes, the Fed will take corresponding action.

The first prediction data released by the US Commerce Department showed that in the third quarter of this year, The actual gross domestic product of the United States increased by 1.9% at an annualized rate, slower than the 2% growth in the 3.1% and second quarters of the first quarter. 。

In July 31st this year, the Federal Reserve announced the first rate cut since December 2008. In September 18th, the Federal Reserve again announced a cut in the federal funds rate from 25 to 1.75% to 2%.

Two

The market forecasts the Fed's current round of adjustment or stop.

What is the response of the financial market to the Federal Reserve's interest rate cut? What signals did the Federal Reserve release after its two day monetary policy decision was ended?

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As the third rate cut since July this year, the Fed's interest rate decision generally accords with broad market expectations. However, the market has noticed an important change. The Fed has removed a statement which has been commonly used since June. Take appropriate measures to maintain expansion "Instead," In assessing the appropriate path of the federal funds interest rate target, the committee will continue to monitor the impact of the information received on the economic outlook. " This is interpreted by the market. The Fed hinted to the outside world that it might stop this round of adjustment and stop seeking further interest rates. 。

In the Fed's monetary policy decision, inflation data is a key reference indicator, Powell stressed in the press conference that any future rate hike must be established. On the basis of sustained and steady growth in inflation This means: The Fed's next interest rate increase may take a long wait, and the US monetary policy will remain loose for some time. 。

After the announcement of the interest rate decision by the Fed and Powell's speech, the financial market was "enthusiastic." The three major indexes of US stocks rose sharply, rising from a fall to a high level. The S & P 500 index closed 3046.77 points, once again refreshed the closing history.

Source: Wind

There was a big reversal in the US dollar index. After the rush, the "cliff clipper" fell sharply, and the US bond yield also went down collectively.

Source: Wind

Gold prices also staged a V reversal, which quickly pulled up shortly after diving.

Source: Wind