The Federal Reserve's rate cuts, while seemingly stabilizing, have ignited debate among market analysts. VT Markets Research suggests the Fed's cautious approach could be influenced by factors like inflation rebounds, new government policies, and strong economic performance.
In September 2024, the Federal Reserve initiated a rate-cutting cycle, lowering rates three times over the year by a total of 100 basis points to a range of 4.25%-4.5%. While this trajectory appears stable on the surface, the VT Markets research team highlights that factors like inflation rebounds, new government policies, and optimistic economic forecasts might compel the Fed to adopt a more cautious stance on its easing strategy.
The Federal Reserve’s “defensive” strategy, in this way, can be interpreted as either a “precise” market insight or a precautionary measure. The VT Markets Research Desk proposes the following perspectives for analysis.First, the Research Desk considers that during the December Federal Open Market Committee (FOMC) meeting, an 11:1 vote resulted in a rate cut to 4.25%-4.5%, aligning with market expectations. However, the updated dot plot projections surprised markets, slashing 2025’s expected rate cuts from four to two. Although this shift caused short-term market ripples, VT Markets suggests the slower pace reflects economic resilience and labor market strength. The Fed appears focused on avoiding over-stimulation and carefully balancing economic growth against inflation risks.The Summary of Economic Projections (SEP) reinforces the Fed’s cautious approach, with GDP growth forecasts for 2024 and 2025 revised upward from 2% to 2.5% and 2.1%, respectively. Core Personal Consumption Expenditures (PCE) inflation forecasts also rose from 2.2% to 2.5%. Fed Chair Jerome Powell highlighted these optimistic trends during the Fed’s press briefing, emphasising that reduced job market risks and declining housing inflation are pivotal in shaping future rate adjustments.As the Trump administration prepares to take office, the potential impact of its economic policies on inflation and rate cuts remains a focal poin
FEDERAL RESERVE RATE CUTS INFLATION ECONOMIC POLICIES MARKET ANALYSIS
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Cautious week ahead for Bursa Malaysia amid Fed rate speculationsKUALA LUMPUR, Dec 14 — Trading on Bursa Malaysia is expected to be subdued next week as investors adopt a wait-and-see approach ahead of the Federal Open Market Committee (FOMC)...
Read more »
Ringgit Dips Against US Dollar After Fed's Cautious Rate Cut SignalThe ringgit weakened against the US dollar on Thursday following the Fed's indication of a more conservative approach to rate cuts in 2025. Market analysts attribute the decline to the Fed's cautious tone and persistent US dollar strength fueled by expectations of limited rate cuts in 2025.
Read more »
Asian Stocks Fall as Fed Signals Slower Rate Cuts, Yen Dips After BOJ Keeps Rates SteadyThe U.S. Federal Reserve's hawkish shift, signaling a slower pace of rate cuts next year, triggered a decline in Asian stocks and a strengthening of the dollar. The Bank of Japan's decision to maintain interest rates also pushed the yen lower.
Read more »
Markets React to Fed Rate Cuts and Trump's Economic PlansGlobal markets saw mixed results as investors grappled with the Federal Reserve's decision to cut interest rates and the potential economic impact of Donald Trump's policies.
Read more »
Ringgit seen trading in cautious mode ahead of US rate decision next week(Reuters) - Thanasi Kokkinakis and Nick Kyrgios will team up for doubles at next month's Australian Open, and the entertaining local duo is aiming to dazzle crowds at the Grand Slam again.
Read more »
Ipoh city council cuts assessment rate by up to 2pc after residents objectIPOH, Dec 26 — A significant portion of assessment taxes within the administrative area of the Ipoh City Council (MBI) has been reduced by between 0.25 percent and two percent,...
Read more »