Fed Rate Cut and GDP Outlook Stir Mixed Market Reactions
The Federal Reserve delivered a widely anticipated 25 basis-point rate cut, bringing its benchmark range to 4%–4.25%. Chair Jerome Powell framed the MOVE as preemptive "risk management" amid softening labor data and persistent inflation. Wall Street responded tepidly—the Dow rose 0.6% on blue-chip strength while the S&P 500 and Nasdaq dipped marginally. Futures hinted at cautious optimism.
Revised projections reveal the Fed's bifurcated outlook: GDP expectations edged up to 1.6% for 2024, yet Core inflation remains sticky at 3.1%. The implied resilience of the economy contrasts with mounting stagflation whispers among traders. "You're seeing a market pricing two realities," noted one strategist. "Growth acceleration versus monetary policy latency."
