The rate cut didn’t come as a complete surprise, as the stock market had been banking on it. They just weren’t sure if it would be the half-point cut, or a more cautious quarter-point, reports Madlen Read for the Associated Press. The move today puts the federal funds rate target at 3%, the lowest since June 2005, according to Mark Felsenthal for Reuters.
Once the cut was announced, the stock markets went positive: within minutes of the decision, the Dow Jones industrial average jumped more than 100 points at one point. The S&P 500 and Nasdaq also rose following the report.
It’s positive news, but between this latest cut and last week’s unexpected three-quarter point cut, will it be enough to rejuvenate the economy? Let’s wait and see.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.