Your Capital Markets Snapshot: Federal Reserve's Cut Interest Rates

Last week, the Federal Reserve's cut interest rates by 50 basis points (bps) instead of the typical 25 bps, bringing the Federal Funds Rate to a range of 4.75%-5.00%. Chairman Powell explained they believed inflation will continue to decrease towards their 2% target and signs of a softening labor market supported their decision to begin cutting rates. While they explained more rate cuts would follow, they would not making timing/size commitments and explained they would closely monitor incoming data as they work to reduce their policy rate to a more neutral level. This decision was well-received by the equity markets, leading to new all-time highs for the S&P 500 and Dow Jones Industrial Average. The NASDAQ also saw a substantial increase, jumping 2.5% on Thursday following the Fed's announcement, but is still shy of its previous ATH.