Bloomberg Businessweek Instant Reaction: The Fed Decides
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Dec 18, 2024 Matt Lozelli, a Deutsche Bank analyst, offers keen insights into the Federal Reserve's recent decision to cut interest rates by 25 basis points. He discusses the internal divisions within the Fed and the revised economic projections for GDP and unemployment. Lozelli highlights Chairman Powell's focus on real-world challenges, like the plight of the working homeless. The conversation delves into the complex balance the Fed must strike between inflation concerns and economic stability, all while navigating an unpredictable global landscape.
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Hawkish Cut and Market Reaction
- The Federal Reserve cut interest rates by 25 basis points, surprising some market participants.
- The market reaction included dollar strength and a slight dip in equities.
Hawkish Cut and Dissent
- This 25 basis point cut, along with previous cuts, totals 100 basis points since September.
- The Fed's move is seen as hawkish given its revised forecasts.
Market Significance
- The Fed's decision is not a simple one, with significant market moves like Yen reaching 154.
- There's more than expected hawkishness in this rate cut.