Investors only have themselves to blame; Jerome Powell steals the joy of Christmas
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Federal Reserve Chair Jerome Powell released his statement on Wednesday shortly after the Fed released its decision to cut interest rates. The chair highlighted the Fed will evaluate progress on inflation before making further cuts in 2025. Fed Chair Jerome Powell raised investors’ eyebrows in his statement after the Fed announced further interest rate reductions. The chair expressed that there was a lot of uncertainty that would require the Fed to move slower before making any more cuts. Powell expresses inflation is still a concern amid the rate-cut decision Jerome Powell indicated the Fed would apply a more cautious approach in 2025 before making further interest rate cuts. In the final policy decision in 2024, the Fed lowered interest rates by a quarter point. The institution also signaled two more cuts in 2025 in its Summary of Economic Projections released on Wednesday. Read Chair Powell’s full opening statement from the #FOMC press conference (PDF): https://t.co/jjyoItUGmt pic.twitter.com/4bHHy3t80Z — Federal Reserve (@federalreserve) December 18, 2024 The decision to make further cuts was widely expected; however, investors were surprised by the “dot plot” indicated in the new policy. The plot suggested the Fed would only reduce its fund rate by half a percentage point in the coming year. In response to the announcement, markets recorded declines as investors reacted to the uncertainty. The S&P, for instance, fell by more than 3%, pulling from its all-time high, while the Dow Jones Average fell by 2.6%. The official expressed that he believed inflation would continue to be a challenge in the next administration. The central bankers’ prediction on inflation is reportedly ending higher than expected in this financial year and even higher in 2025. When the path is uncertain you go a little bit slower, It’s not unlike driving on a foggy night or walking…
