US Fed Meeting Live Updates: Powell-led FOMC slashes key interest rate by 50 bps
US Fed Meeting Live Updates: The US Federal Reserve announced its sixth policy decision for 2024 on September 18 after a two-day Federal Open Market Committee (FOMC) meeting and slashed the benchmark interest rate by 50 basis points (bps) or (½) half a percentage point to 4.75 per cent-5 per cent for the first time in four years, broadly in line with Wall Street estimates.
US Fed policymakers see the benchmark interest rate falling by another half-point (50 bps) by the end of this year, another full percentage point in 2025, and a final half-point reduction in 2026 to end in a 2.75 per cent-3.00 per cent range. One bps is equal to one hundredth (1/100) of a percentage point.
US inflation has tumbled from a peak of 9.1 per cent in mid-2022 to a three-year low of 2.5 per cent in August, not far above the US Fed’s two per cent target. With inflation barely above their target level, US Fed officials have been shifting their focus toward supporting a weakening job market and achieving a rare “soft landing,” which curbs inflation without causing a sharp recession.
In its previous meeting, Fed chair Jerome Powell-led rate-setting panel unanimously voted to keep the policy rate at the 23-year high in the range of 5.25 per cent—5.50 per cent. The US central bank maintained borrowing rates steady for 14 straight months to bring down inflation in the world’s largest economy.
After raising the policy rate by 5.25 percentage points since March 2022 in one of the swiftest Fed reactions to combat the worst outbreak of inflation in 40 years, the central bank has held the rate on hold since July 2023 to anchor in high inflation and consistently bring it down toward the two per cent target range.
Stay tuned to our US Fed Meeting Live blog for the latest updates on FOMC meeting outcome.
US Fed Meet Live: Expect RBI to cut repo rate in policy meeting next month: Wallfort Financial Services
US Fed Meet Live: The 50 bps rate cut is a bold stance by the US Fed to revitalise their subdued economy, which will in turn open the door for other global central banks, including RBI to kickstart the softer interest rate regime. Given that India’s inflation rate has also been on the mend for the past few months, we expect the RBI to announce rate cut in its policy meeting next month, which will benefit few sectors that are leveraged such as metals and infrastructure. However, the rate cut may hurt the banking sector, which is already struggling with lower CASA, and the falling interest rate scenario going ahead could see customers stay away from bank deposits, says Vijay Bharadia, Founder at Wallfort Financial Services Ltd.
US Fed Meet Live: Dovish 50 bps cut means Fed more worried about economy: MintCFD
US Fed Meet Live: The market had been moving to price a 50 bps move over the last few days and the Fed has delivered. The Fed did the same in 2001 and 2007 they also began with a 50 bps cut. Recessions followed within months, which doesn’t bode well for the Fed. This will fuel concerns that the dovish 50 bps cut today means the Fed is more worried about the state of the economy than recent employment and retail sales data would suggest, said Raj Patel, CMO at MintCFD.
US Fed Meet Live: Sensex, Nifty 50 open at record high levels
US Fed Meet Live: Indian stock market opened with strong gains with the benchmark indices, Sensex and NIfty 50 opening at record high levels on Thursday after the US Federal Reserve cut interest rates by 50 basis points (bps). The Sensex opened 410.94 points, or 0.50%, higher at 83,359.17, while the Nifty 50 opened 109.50 points, or 0.43%, higher at 25,487.05.
US Fed Meet Live: Hong Kong central bank cuts interest rate
US Fed Meet Live: The Hong Kong Monetary Authority (HKMA) cut its base rate charged via the overnight discount window by 50 basis points to 5.25%, tracking a move by the US Federal Reserve, Reuters reported. HKMA said the US interest rate cut will have a positive impact on the economy of the Asia financial centre and will provide some room for easing of local interest rates.
US Fed Meet Live: China’s yuan eases after Fed’s outsized rate cut
US Fed Meet Live: China’s yuan eased slightly against the dollar. The onshore yuan was 0.42% lower at 7.1075 to the dollar, compared with the previous close of 7.0780, Reuters reported. Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.0983 per dollar, and 59 pips weaker than a Reuters’ estimate.
US Fed Meet Live: Fed likely to not rush into reducing rates aggressively: Ladderup Wealth Management
US Fed Meet Live: The rate cut indicates the confidence of the Federal Reserve on its policy outcomes over the last two years, as they stood steadfast on their resolve to bring down inflation. With inflation now within the targeted zone, but still a bit away, and Labour market conditions becoming a concern, the cut is coming at an opportune time. The market seems to be building another 50 bps rate cut in 2024 and a few further cuts in 2025. We feel that the Fed is not going to rush into reducing rates aggressively but act strictly based on data, as has been seen over the past two years, said Raghvendra Nath, MD, Ladderup Wealth Management.
US Fed Meet Live: Expect first RBI repo rate cut by December: Madhavi Arora
US Fed Meet Live: The contradiction between an outsized cut and a healthy economy proved tricky to justify, and markets are expecting much more easing than projected, with the UST curve bear-steepening on account of Powell’s pushback against larger cuts ahead. This start to the easing cycle provides some space to EMs to kick-start theirs too, but with low global volatility thus far, the RBI is likely to remain focused on domestic dynamics, with a first rate cut by December, said Madhavi Arora, Lead – Economist at Emkay Global Financial Services.
US Fed Meet Live: Lower interest rates can further stimulate VC deal flow: Ervin Tu of Prosus Group
US Fed Meet Live: The Fed’s cut today is an important signifier that growth, no longer inflation, is the priority for the US economy. While US VC funding is improving – we saw a 9% YoY rise in deal volumes in H1 2024 versus a 30% YoY reduction in 2023 – the impact of lower interest rates can further stimulate deal flow. With cheaper access to capital, start-ups will be encouraged to invest in themselves for long-term growth and capital providers will be more prepared to take risk, said Ervin Tu, Prosus Group President & Chief Investment Officer.
US Fed Meet Live: Asian markets trade higher with Japan’s Nikkei leading gains
US Fed Meet Live: Asian markets traded higher on Thursday led by a rally in Japan’s Nikkei after a bumper interest rate cut by the US Federal Reserve. The Nikkei rose 2.1%, while the Topix surged 1.9%. South Korea’s Kospi gained 0.57% and the Kosdaq added almost 1%. Hong Kong’s Hang Seng index futures indicated a flat opening. Futures of mainland China’s CSI 300 were marginally lower than its Tuesday’s close.
US Fed Meet Live: Gold prices trade flat
US Fed Meet Live: Gold prices traded flat on Thursday as investors digested Fed Chair Jerome Powell’s comments after the super-sized rate cut by the US central bank. Spot gold was little changed at $2,558.00 per ounce. Bullion rose to a record high of $2,599.92 on Wednesday before closing lower, Reuters reported. US gold futures fell 0.6% to $2,582.70.
US Fed Meet Live: Crude oil prices fall after Fed rate cut
US Fed Meet Live: Crude oil prices fell after a larger-than-expected US Fed rate cut sparked concerns about the US economy. Brent crude futures for November declined 0.46% to $73.31 a barrel, while WTI crude futures for October fell 0.59% to $70.49 a barrel.
US Fed Meet Live: US Dollar recovers
US Fed Meet Live: The US dollar rose broadly on Thursday, recovering from an earlier tumble after the US Fed’s outsized interest rate cut. Against the yen, the greenback gained 0.58% to 143.12. The euro fell 0.04% to $1.1113 and Sterling fell 0.11% to $1.3199.
US Fed Meet Live: FOMC to meet next in November
US Fed Chair Powell-led FOMC will now meet on November 6-7 to deliberate for the next set of policy decisions.
US Fed Meet Live: Key highlights of Powell-led FOMC decision
US Fed Meet Live: Key highlights of Powell-led FOMC decision
-Benchmark interest rates slashed by 50 bps to 4.75-5.00 per cent for the first time since 2020
-Powell-led FOMC dot plot reveals another 50 bps rate cut in 2024, more cuts in 2025, 2026
-US Fed “gained greater confidence that inflation is moving toward two per cent; risks to achieving employment and inflation goals are roughly in balance.
-FOMC will continue reducing its holdings of Treasury securities, agency debt and agency mortgage‑backed securities.
US Fed Meeting Live: Gold retreats from record high as US dollar, yields climb over Fed’s Powell comments
Gold prices slipped from all-time highs on Wednesday, as the US dollar and Treasury yields rose on the back of comments from Federal Reserve Chair Jerome Powell after the U.S. central bank delivered a bumper 50-basis-points (bps) rate cut.
Spot gold was down 0.7 per cent at $2,552.49 per ounce as of 04:07 p.m. ET (2007 GMT), after hitting a record high of $2,599.92 in the wake of the Fed’s rate decision.
US gold futures settled 0.2 per cent higher at $2,598.60. The US central bank kicked off what is expected to be a steady easing of monetary policy with half a percentage point cut and policymakers see the Fed’s benchmark rate falling by another half of a percentage point by the end of this year.
Meanwhile, Powell said that even as inflation pressures have clearly ebbed, he is not ready to say price pressures have definitively cooled. The US dollar rose back up after hitting an over one-year low, making gold less attractive for other currency holders.
The benchmark 10-year yield rose to a one-week high. Spot silver dipped 2.5 per cent to $29.96 per ounce. Platinum slipped 1.1 per cent to $970.10. Palladium fell 5.4 per cent to $1,056.28.
US Fed Meeting Live: S&P 500 erases one per cent gain as Powell signals no rush
Stocks fell as Jerome Powell said the Federal Reserve is not in a rush to ease policy after cutting rates by a half-point. The S&P 500 wiped out a gain of as much as one per cent as the Fed chief cautioned against assuming big rate cuts would continue. Treasury 10-year yields advanced seven basis points to 3.71 per cent. The dollar rose.
Projections released following the Fed’s two-day meeting showed a narrow majority, 10 of 19 officials, favored lowering rates by at least an additional half-point over their two remaining 2024 meetings. Policymakers penciled in an additional percentage point of cuts in 2025, according to their median forecast.
The S&P 500 fell 0.3 per cent. The Nasdaq 100 dropped 0.5 per cent. The Dow Jones Industrial Average lost 0.2 per cent. A gauge of the “Magnificent Seven” megacaps slid 0.1 per cent. The Russell 2000 of small firms was little changed.
US Fed Meeting Live: Wall Street closes modestly lower; US stocks trade choppy after Fed rate cut
US stocks closed with modest losses on Wednesday, well off their intraday highs, after the Federal Reserve cut interest rates by 50 basis points, the high side of estimates for its first cut in more than four years.
Trading was choppy. Prior to the announcement, the S&P 500 oscillated between modest gains and losses. The benchmark index rose as much as one per cent after the announcement before paring gains and finally closing lower.
According to preliminary data, the S&P 500 lost 16.37 points, or 0.29 per cent, to end at 5,618.21 points, while the Nasdaq Composite lost 52.39 points, or 0.30 per cent, to 17,575.67. The Dow Jones Industrial Average fell 97.30 points, or 0.23 per cent, to 41,508.88.
Markets are now fully pricing in a cut of at least 25 basis points at the Fed’s November meeting, with a roughly 35 per cent chance for another 50 basis point cut. Markets have rallied this year, with all three major indexes setting record highs on prospects of lower interest rates as inflation moderated and the jobs market showed gradual signs of cooling. The Dow and S&P 500 hit intraday highs on Wednesday.
US Fed Meeting Live: What Fed dot plot reveals
Fed Governor Michelle Bowman voted against decision in favor of a smaller, quarter-point cut, the first such dissent since June 2022 and the first time a Fed governor has dissented since September 2005.
“Dot plot” of rate projections shows the median official expected to lower rates by a percentage point by year-end, implying two more quarter-point cuts or one larger, half-point cut; nine of 19 officials penciled in 75 basis points of cuts or less
Median rate forecast for 2025 falls to 3.4 per cent from 4.1 per cent in June, implying four additional quarter- point moves next year. The statement adds language to say the committee is “strongly committed to supporting maximum employment” in addition to returning inflation to its two per cent goal.
US Fed Meeting Live: Michelle Bowman dissent over cut is first from a Fed Governor since 2005
Michelle Bowman cast the first dissenting vote by a Federal Reserve governor since 2005, preferring to cut rates by a smaller amount at Wednesday’s policy meeting. The Fed cut rates by 50 basis points, or half a percentage point, while Bowman was in favor of a 25-basis-point cut, according to a statement by the central bank.
She has remained cautious about disinflation, saying in an August 20 speech that price growth remained “uncomfortably” above the Fed’s two per cent goal and arguing for lowering the fed funds rate “gradually.”
Dissents at the Fed have been rare, especially during Chair Jerome Powell’s tenure. The last one came from a regional bank president in June 2022, when Esther George, then chief of the Kansas City Fed, dissented in favor of raising rates by a smaller amount.
US Fed Meeting Live: US President Joe Biden to speak on US economy
US President Joe Biden said on Wednesday that he will speak on Thursday about the economy after the Federal Reserve cut interest rates by half of a percentage point. “We just reached an important moment: inflation and interest rates are falling while the economy remains strong,” Biden said in a post on X.
US Fed Meeting Live: Fed lowering rate is ‘welcome news for Americans’: US Vice-President Kamala Harris
Democratic presidential candidate Kamala Harris praised the US Federal Reserve’s decision to lower interest rates Wednesday, while reiterating her committment to fighting inflation.
“While this announcement is welcome news for Americans who have borne the brunt of high prices, my focus is on the work ahead to keep bringing prices down,” the Vice President said in a statement.
Harris said she was focused on how to keep bringing prices down. “I know prices are still too high for many middle class and working families,” she said in a statement.
US Fed Meeting Live: Gold swung after hitting fresh record above $2,600 an ounce
Gold swung after hitting a fresh record above $2,600 an ounce after Federal Reserve Chairman Jerome Powell signaled policymakers aren’t in a rush to aggressively lower interest rates following the US central bank’s half percentage point cut on Wednesday. Gold prices have broken out dramatically this year, soaring more than 24 per cent to successive records.
While the rally at the start of 2024 was underpinned by emerging market demand — particularly from central banks and Asian consumers and investors — the focus in recent months has shifted squarely to the Fed, and the outlook for the US economy. Non-yielding bullion usually benefits in a low-rate environment, and recessionary worries tend to drive investors to seek safety in gold.
US Fed Meeting Live: US dollar hits 14-month low after US Fed delivers 50 bps rate cut
The US dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point. The dollar index was last down 0.53 per cent on the day at 100.37, the lowest since July 2023. The euro gained 0.55 per cent to $1.117575. The greenback weakened 1.07 per cent to 140.825 Japanese yen.
US Fed Meeting Live: US Fed independence ‘good for the public’, says Powell
The US Federal Reserve’s independence from politics “has been good for the public,” Fed Chair Jerome Powell told reporters Wednesday, adding that he hopes and believes that this arrangement will continue.
“We’re not serving any politician, any political figure, any cause, any issue, nothing,” Powell said in response to a question about Fed independence. Republican presidential candidate Donald Trump recently suggested the US president should have “at least” a say over Fed decisions.
US Fed Meeting Live: Canadian dollar hits 12-day high as Fed opts for supersized rate cut
The Canadian dollar strengthened against its US counterpart on Wednesday as the Federal Reserve cut interest rates by half a percentage point, but the move was limited as investors raised bets the Bank of Canada would step up the pace of its easing.
The loonie was trading 0.3 per cent higher at 1.3560 to the US dollar, or 73.75 US cents, after touching its strongest level since September 6 at 1.3542. Wall Street rose, bond yields eased and the US dollar extended recent declines against a basket of major currencies.
Canadian bond yields eased across the curve. The two-year was down 3.3 basis points at 2.889 per cent, moving closer to the two-year low it touched during Tuesday’s session at 2.845 per cent.
US Fed Meeting Live: Powell says Fed might have launched rate cuts in July had it seen July jobs report
The US Federal Reserve might have first cut interest rates in late July had it seen the jobs report for the month, released days later, that showed softening in the US labor market, Chair Jerome Powell said on Thursday.
“If you ask, you know, if we’d gotten the July report before the meeting, would we have cut? We might well have,” Powell told a news conference after the Fed cut rates by 50 basis points. “We didn’t make that decision, but you know, we might well have.”
US Fed Meeting Live: Fed board member Michelle Bowman dissents on 50 bps cut
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Lisa D. Cook; Mary C. Daly; Beth M. Hammack; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against this action was Michelle W. Bowman, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. Read full text of FOMC statement here
US Fed Meeting Live: Bitcoin edges higher after US Fed delivers 50 bps rate cut
Bitcoin edged higher after the Federal Reserve reduced borrowing rates for the first time since the Covid pandemic paralyzed the economy more than four years ago and helped cryptocurrencies break into the mainstream.
The original digital asset gained about 1.4 per cent to $60,989, while smaller tokens were mixed. Lower rates usually help to spur an increase in demand for riskier assets. Bitcoin has been trading within a relatively narrow range since setting a record high of almost $74,000 in March.
US Fed Meeting Live: Powell says ‘nothing’ political discussed in Fed rate meeting
US Federal Reserve policymakers discuss “nothing else” but how to serve the public as it meets on interest rates, Fed Chair Jerome Powell said Wednesday, when asked about potential criticism that cuts have political motivations.
“Our job is to support the economy on behalf of the American people, and if we get it right, this will benefit the American people significantly,” Powell told a press conference. “We don’t put up any other filters.”
US Fed Meeting Live: Wall Street advances after Fed cuts rates 50 basis points
US stocks briefly shot higher on Wednesday after the Federal Reserve cut interest rates by 50 basis points, the high side of estimates for its first cut in more than four years.
Trading was choppy. Prior to the announcement, the S&P 500 oscillated between modest gains and losses. The benchmark rose as much as one per cent after the announcement before paring gains.
The Dow Jones Industrial Average rose 103.40 points, or 0.25 per cent, to 41,709.58, the S&P 500 gained 22.31 points, or 0.40 per cent, to 5,656.89 and the Nasdaq Composite gained 132.71 points, or 0.75 per cent, to 17,760.77.
Borrowing costs had been parked at their highest levels in over two decades since July 2023, when the central bank last hiked interest rates by 25 basis points to between 5.25 per cent and 5.50 per cent to combat inflation.
US Fed Meeting Live: Wall Street reacts to ‘dovish’ first US Fed rate cut in four years
Traders added to bets on further easing by the Federal Reserve, US stocks eyed record highs and the dollar ticked lower after the US central bank cut interest rates by a half-point in its first reduction in four years.
Fed officials’ so-called dot plot, detailing officials’ projections for the path of monetary policy in the months ahead, showed a further 50 basis points of easing slated for this year. Yet markets now suggest the Fed will cut at least another 72 basis points. In the immediate aftermath, short-end Treasuries rose, the S&P 500 Index held gains and a Bloomberg gauge of the dollar slumped.
The move brings to an end weeks of speculation about whether the Fed would kick start its easing cycle with a quarter- or half-point cut. Traders were pricing a roughly even chance of each outcome in the immediate run-up to the decision.
US Fed Meeting Live: Fed’s Powell says not thinking about stopping runoff of Fed’s balance sheet
The Federal Reserve is not considering stopping the runoff of its balance sheet and can do that and cut rates at the same time, as reserves remain stable, Fed Chair Jerome Powell said on Wednesday. Powell told a news conference that recent shrinkage of the Fed’s balance sheet has largely been from overnight borrowings.
“I think what that tells you is we’re not thinking about stopping runoff because of this at all. We know that these two things can happen side by side. In a sense, they’re both a form of normalization, and so for a time, you can have the balance sheet shrink but also be cutting rates.”
US Fed Meeting Live: Powell says first rate cut marks ‘beginning’ of a process
The US Federal Reserve’s first interest rate cut since 2020 marks the start of a broader process of adjusting policy as inflation cools, Fed Chair Jerome Powell told reporters Wednesday. “We know that it is time to recalibrate our policy to something that is more appropriate given the progress on inflation and on employment,” Powell said.
US Fed Meeting Live: Gold hits record high after US Fed delivers 50 bps rate cut
Gold prices rose to an all-time high on Wednesday after the U.S. Federal Reserve cut interest rates by 50 basis points, sending the dollar lower.
Spot gold was up 0.9 per cent at $2,592.39 per ounce as of 02:17 p.m. ET (1817 GMT). US gold futures settled 0.2 per cent higher at $2,598.60.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
Following the Fed’s cut, the dollar fell 0.5 per cent – to its lowest since July 2023 against its rivals. Meanwhile, spot silver rose 0.6 per cent to $30.93 per ounce, after hitting a two-month high on Monday. Platinum was steady at $981.10 per ounce. Palladium was down 3.2 per cent at $1,081.00.
US Fed Meeting Live: US yield curve hits steepest in more than two years
The US Treasury yield curve on Wednesday reached its steepest level since July 2022, after the Federal Reserve cut interest rates by 50 basis points (bps), a larger-than-usual rate reduction as the central bank grappled with a weakening labor market.
The spread between US two- and 10-year yields hit as wide as 10.2 bps and was last at 8.6 bps. A steeper curve suggests more easing is on the way. The Fed said it has gained greater confidence that inflation is moving sustainably toward its two per cent goal and that the risks between prices and employment are roughly in balance.
US Fed Meeting Live: FOMC statement on economic outlook
“The Committee seeks to achieve maximum employment and inflation at the rate of two per cent over the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward two per cent, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”
The FOMC added in its statement, “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. “
“The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
US Fed Meeting Live: FOMC statement on policy rates
“In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 per cent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
US Fed Meeting Live: US Fed sees additional 50 bps rate cut by end of 2024, more lined up in 2025, 2026
Fed Policymakers see the Fed’s benchmark rate falling by another half of a percentage point by the end of this year, another full percentage point in 2025, and by a final half of a percentage point in 2026 to end in a 2.75 per cent -3 per cent range.
US Fed Meeting Live: Powell-led FOMC cuts rates by 50 bps to 4.75-5% for first time in four years
The US Federal Reserve has cut its key lending rate by half a percentage-point Wednesday in its first reduction since the pandemic, sharply lowering borrowing costs shortly before November’s presidential election.
Policymakers voted 11-to-1 in favor of lowering the US central bank’s benchmark lending rate to between 4.75 per cent and 5.00 per cent, the Fed announced in a statement. They also penciled in an additional half-point of cuts before the end of the year.
US Fed Meeting Live: Wall Street slips ahead of US Fed policy verdict, Dow Jones sheds 100 points
Wall Street’s main indexes slipped in volatile trading on Wednesday ahead of the Federal Reserve’s highly anticipated first interest rate cut in more than four years, with jitters over the magnitude of the reduction dominating mood.
Borrowing costs have stayed at their highest levels in over two decades since July 2023, when the central bank last hiked interest rates by 25 basis points to between 5.25 per cent and 5.50 per cent to combat inflation. But the focus recently has moved to a moderating labor market.
At 12:04 p.m., the Dow Jones Industrial Average fell 101.36 points, or 0.24 per cent, to 41,504.82, the S&P 500 lost 15.32 points, or 0.27 per cent, to 5,619.26 and the Nasdaq Composite lost 68.11 points, or 0.39 per cent, to 17,559.95.
Eight of the 11 S&P 500 sectors slipped, although healthcare edged up 0.1 per cent.The Russell 2000 index, tracking small caps, also dipped 0.2 per cent, while the CBOE Volatility index hit a one-week high and was last up 1.53 points at 19.14.
Still, the benchmark S&P 500 and the blue-chip Dow are trading just shy of their respective record highs ahead of the Fed decision, expected at 2:00 p.m. ET.
US Fed Meeting Live: Oil trades 1% lower after mixed storage data ahead of US Fed verdict; Brent crude at $73, faces resistance $75/bbl
International crude oil prices fell on Wednesday as the market cautiously awaited a rate cut announcement from the US Federal Reserve, while investors digested a mixed crude and fuel storage report out of the United States.
Brent crude futures for November lost 55 cents, or 0.8 per cent, at $73.15 a barrel. US crude futures for October shed 53 cents, or 0.7 per cent, to $70.66.
Crude inventories fell by 1.6 million barrels to 417.5 million barrels in the week ending September 13, said the Energy Information Administration (EIA)
Brent has staged a recovery since falling below $70 to its lowest since December 2021 on September 10. It faces resistance at around $75 due to weak global refinery margins that signal sluggish demand.
US Fed Meeting Live: European Stocks drop ahead of Fed’s rate decision; Novo slips
European stocks fell as attention turned to the Federal Reserve’s highly anticipated interest-rate decision and any signals on its policy outlook. Novo Nordisk A/S shares slipped on worries that Ozempic could be targeted for a US price cut.
The Stoxx Europe 600 Index was down 0.4 per cent at 9:38 a.m. in London. Technology and health care stocks lagged, while autos and banks outperformed.
Novo Nordisk fell two per cent as it said its blockbuster diabetes shot Ozempic was “very likely” to be one of the next drugs targeted for a price cut in bargaining with the US government’s Medicare program.
Europe’s benchmark gauge has had a volatile recovery from the summer selloff, as the prospect of monetary-policy easing hasn’t fully tempered signs of an economic slowdown. The index still stands about two per cent below its August record high.
After the European Central Bank reduced rates last week, focus Wednesday is on the Fed’s policy meeting, where officials are expected to lower rates for the first time in four years. Traders are split between wagers on a 25- and 50-basis point reduction, according to swaps data.
US Fed Meeting Live: Gold edges higher as markets gear up for Fed’s rate verdict
Gold prices edged higher on Wednesday as investors are widely expecting the US Federal Reserve to deliver its first interest rate cut in more than four years later in the day.
Spot gold rose 0.1 per cent to $2,570.79 per ounce as of 12:20 p.m. ET (1620 GMT), hovering below a record high of $2,589.59 hit on Monday. US gold futures were up 0.2 per cent to $2,597.80.
Spot silver fell one per cent to $30.39 per ounce, after hitting a two-month high on Monday. Platinum eased 0.8 per cent to $974.05. Palladium was down 4.8 per cent at $1,062.06.
US Fed Meeting Live: D-Street experts see 25 bps rate cut by US Fed
Rohit Arora, CEO and Co-founder, Biz2Credit and Biz2X:
“Right now, asset prices are high, with housing affordability at its lowest in over 10 years, and job losses are rising in key areas like tech and retail. Consumer demand has dropped sharply, with retail sales falling by three per cent last quarter, creating a recession-like environment.
Inflation is still high, cutting into people’s spending power and slowing the economy. It’s expected that the Fed will lower interest rates by 25 bps to help counteract the economic slowdown—GDP growth is down to 1.2 per cent—and to offer some relief to the struggling job market.”
US Fed Meeting Live: What India’s latest inflation print suggests
Ranen Banerjee- Partner and Leader Economic Advisory, PwC India:
“The lower than expected WPI number is primarily owing to a fall in fuel and electricity components as global crude prices have softened given the Chinese demand worries as well as headwinds in Europe and US. The vegetables component has also dropped significantly that is expected given the boost in production that takes place during monsoon months.
However, extremely high inflation prints of onion and potato does not bode well for the thalinomics as the food prices and hence the thali prices of the population will see upward price pressures. This is also the worry that has been expressed by the RBI Guv on the food inflation risk continuing. The high intensity of rainfall in many areas and extent of consequent damages to crops will determine the food inflation trajectory and hence we can expect the MPC to be cautious and continue with its pause on policy rates in its next meeting.”
US Fed Meeting Live: US Fed set to announce first rate cut in four years: How will it impact India’s RBI policy? Experts weigh in
D-Street analysts said that the likelihood of the Federal Reserve opting for a substantial 50-basis point rate cut in September hinges on the central bank’s assessment of the employment and inflation balance leading up to the meeting. Although indicators suggest a potential rate decrease, the odds of such a significant cut are still uncertain.
‘’The strongest tail wind comes from the expected rate cuts by the Fed which will spill over to other central banks including the RBI. The Indian economy now needs monetary stimulus through rate cuts and this is likely in the next policy meeting,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Market experts also say the recent shift in foreign investors’ stance towards the domestic market and the anticipation that the RBI will align with the Fed’s actions are expected to foster a positive outlook for the Indian stock market in the near term.
‘’Currently, traders estimate a 38 per cent chance of a 50-basis point reduction, up from an earlier expectation of 33 per cent, while a 25-basis point cut has a 62 per cent probability. In response to a potential Fed rate cut, Indian stocks that may benefit include those in the IT, BFSI (Banking, Financial Services, and Insurance), Auto, and Realty sectors,” said Palka Arora Chopra, Director of Master Capital Services Ltd.
According to Chopra, a Fed rate reduction typically weakens the US dollar, increases liquidity, and lowers borrowing costs, positively impacting these sectors.
‘’The rate cuts will be welcomed positively by the Indian market because the RBI is following the US Fed’s lead when it comes to interest rates, and their announcements will spur additional rate cuts in India, which will enhance liquidity, attract capital inflows, and strengthen the value of the rupee,” added Chopra.
US Fed Meeting Live: Gold edges higher as markets gear up for Fed’s rate verdict
Gold prices edged higher on Wednesday as investors are widely expecting the US Federal Reserve to deliver its first interest rate cut in more than four years later in the day. Spot gold rose 0.1 per cent to $2,570.79 per ounce, hovering below a record high of $2,589.59 hit on Monday.
US gold futures were up 0.2 per cent to $2,597.80. Spot silver fell one per cent to $30.39 per ounce, after hitting a two-month high on Monday. Platinum eased 0.8 per cent to $974.05. Palladium was down 4.8 per cent at $1,062.06.
US Fed Meeting Live: Nifty IT index posts worst intraday performance in six weeks
The sharp drop in the large-cap IT stocks has led the Nifty IT index to plunge by 3.02 per cent to 41,814 points, falling below the 42,000 mark for the first time since September 9. Today’s drop in the index was the biggest intraday drop in six weeks, and also this decline has pushed the index to a two-week low.
The significant decline in IT stocks observed today is mainly due to profit-taking by investors after a strong rally over recent months. Since June, IT stocks have experienced a bullish trend, with the Nifty IT index rising by 32 per cent from June to August, leading investors to lock in profits.
This profit booking occurred ahead of the anticipated US Federal Reserve rate-reduction cycle, expected to start on September 18. With easing inflation and a cooling labour market in the US, investors are preparing for this policy shift. Market expectations had priced in a 25-basis point cut, with some anticipating a more substantial 50-basis point reduction, which analysts believe could spur a rally in stocks.
US Fed Meeting Live: London stocks drop after inflation data, focus shifts to Fed
British stock indexes dropped on Wednesday as investors reined in bets on interest rate cuts by the Bank of England, while global risk sentiment was fragile ahead of a policy decision from the US Federal Reserve later in the day.
The blue-chip FTSE 100 ended 0.7 per cent lower, racking up the steepest losses among European peers, while an index of midcap stocks was down 0.5 per cent. Both the indexes closed at their highest since early September on Tuesday.
UK annual consumer price inflation was steady at 2.2 per cent in August, in line with forecasts, data showed. However, services inflation – a figure closely watched by the Bank of England – rose to 5.6 per cent, slightly more than forecast.
The British pound rose against the dollar following the inflation data, which further pressured the FTSE 100’s export-focused companies. Evidence of persistent inflationary pressures led traders to trim bets on the BoE cutting rates at its Thursday meeting, where policymakers are expected to keep rates on hold.
US Fed Meeting Live: Bridgewater Associates LP founder Ray Dalio downplays next Fed move as investors flag China risks
The size of the Federal Reserve’s interest rate cut this week won’t be a game changer for global investors. However, risks from China’s slowdown continue to weigh on their minds, according to participants at a regional forum.
Bridgewater Associates LP founder Ray Dalio said what the Fed will do this week “doesn’t make a difference” over the longer term as policymakers will ultimately need to keep real interest rates low to allow servicing of mounting debts.
“The Fed has to keep interest rates high enough to satisfy the creditors that they are going to get a real return without having them so high that the debtors have a problem,” Dalio told Bloomberg Television’s Haslinda Amin on the sidelines of the Milken Institute Asia Summit 2024 in Singapore on Wednesday.
Investors have expressed concern over a slowdown in China, which pressures authorities to respond with fiscal and monetary stimulus so the world’s second-largest economy can hit its growth target of around five per cent.
In August, China’s industrial output marked its longest slowing streak since 2021, with consumption and investment weakening more than expected. The People’s Bank of China signalled that fighting deflation would become a higher priority and indicated more monetary easing ahead.
Dalio said a small part of his family office’s portfolio remains invested in China, but he pointed out that the country has “real issues.” “There’s a small percentage of our portfolio in China, and we’ll stay in China through this process,” he said, adding that the country remains a “very attractively priced place” to invest in.