Fed’s Latest Rate Cut Reveals Uncertainty & Workers Turned Off By RTO Policies
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What did the Fed announce in its latest meeting?
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To no one's surprise, the Fed announced its third and final rate cut of 2024 yesterday, reducing the benchmark rate by 25 basis points down to a range of 4.25 to 4.5%. So why did all three major indexes finish deep in the red? While the rate cut itself was all but guaranteed, it was the Fed's cautious outlook for 2025 that had investors a little spooked. The Fed is now projecting only two cuts next year, as opposed to the four that were anticipated back in September. The Fed also revised their forecast for inflation to 2.5%, up from the 2.1% it originally projected. In Jerome Powell's press conference after the announcement, he tried to frame fewer rate cuts as a vote of confidence in the economy, but he also said that the cuts announced at this meeting were a closer call than expected due to just how sticky inflation has been lately.
So, Neil, as we close out 2024 with a pretty strong economy, slowly fading inflation, and a stable job market, the question becomes, what comes next?
And Powell said two rate cuts next year. That was not welcomed by investors. The Dow had its 10th straight day in the red. The S&P had its worst day since August. Yields jumped, which shows that borrowing costs are rising. The mortgage rate jumped above 7% for the first time. This was a very violent reaction.
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Chapters
7 chapters
1
What did the Fed announce in its latest meeting?
2:26–5:08
2
Why did the stock market react negatively after the rate cut?
5:08–10:58
3
What are the implications of the government spending bill?
10:58–20:04
4
How are return-to-office policies affecting hiring?
20:04
5
What are the potential consequences of a government shutdown?
17:06–22:32
6
How does the job market respond to workplace flexibility?
22:32–24:43
7
What does the future hold for corporate policies on remote work?
24:43–27:15
Speakers
2 identifiedMore from Morning Brew Daily
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