Federal Reserve Cuts Rates by 50 Basis Points

The Federal Reserve has initiated a significant monetary policy shift, cutting interest rates by 50 basis points to a range of 4.75%-5%, a larger cut than anticipated by most economists. This decision aims to preemptively support the labor market and comes amid mixed reactions, with some analysts warning it may exacerbate inflationary pressures. The Bank of England, meanwhile, chose to hold rates steady, signaling a more cautious approach. Investors are advised to adjust their portfolios, particularly favoring longer-maturity bonds over cash. Market reactions were positive, with stock indices and gold prices reaching new highs. The Fed has hinted at further rate reductions, which could boost smaller companies and the real estate market.