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Federal Reserve Cuts Interest Rates: Cautious Outlook Damps Market Optimism

The Federal Reserve's quarter-point interest rate cut and reduced projections for future cuts lead to significant market declines and investor unease.

Overview

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On December 18, the Federal Reserve cut its interest rate by 25 basis points to 4.25%-4.50%, but projected only two additional cuts for 2025, disappointing investors. This cautious outlook, attributed to persisting inflation risks and uncertainties surrounding President-elect Trump's policies, triggered a sharp decline in U.S. stock markets, with the Dow dropping over 1,123 points. Investors expressed confusion over Fed Chair Jerome Powell’s mixed messaging and the perceived disconnect between market expectations and current economic realities. Analysts noted the Fed's decision was met with skepticism, highlighting the necessity for a more tempered approach amid turbulent economic conditions.

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Wall Street Pouts Over More Cautious Fed
BloombergBloomberg·6M·
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US cuts interest rates despite inflation risk
BBC NewsBBC News·6M·
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How major US stock indexes fared Wednesday, 12/18/2024
ABC NewsABC News·6M·
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Stocks plunge following Fed inflation projections
NBC NewsNBC News·6M·
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How major US stock indexes fared Wednesday, 12/18/2024
Associated PressAssociated Press·6M·
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Dow loses 1100 points after Fed projects fewer rate cuts
The HillThe Hill·6M·
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History

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  • 6M
    BBC News logo
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    4 articles
  • 6M
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    3 articles