Fed Cuts Rates by 50 Basis Points

The Federal Reserve has cut interest rates by 50 basis points, down to 4.75%-5.00%, marking its first cut since 2020. This decision follows debates on whether a 25 or 50 basis-point cut was appropriate, with the larger cut ultimately chosen to address economic conditions. Despite the cut, Fed Chair Jerome Powell emphasized that this does not signify a victory over inflation and that future rate cuts will depend on evolving economic data. Meanwhile, Japan's potential next prime minister, Sanae Takaichi, advised the Bank of Japan to delay further rate hikes to support economic recovery. Market responses indicate that bond yields have adjusted accordingly, with the two-year Treasury yield dropping in anticipation of further rate adjustments.