On The Market

The Fed Finally Cuts Rates, but Will It Even Matter? w/NYT’s Jeanna Smialek

Sep 26, 2024

Jeanna Smialek, a Federal Reserve reporter for The New York Times, dissects the implications of the Fed's recent rate cut. She discusses how this bold move aims to ease borrowing for homebuyers and businesses, even as market speculation looms. With inflation dwindling yet unemployment rising, Jeanna ponders if the Fed acted quickly enough. She shares insights on future cuts expected in 2025, exploring their potential impact on rent and home prices. Get ready for a captivating discussion on the balance of economic forces!

38:14

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Jeanna Smialek

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Quick takeaways

The Fed's recent 0.50% rate cut indicates a strategic pivot towards stimulating the economy, balancing inflation control with employment concerns.

Future rate cuts, projected through 2025, aim to enhance borrowing affordability for consumers and businesses, influencing the housing market significantly.

Deep dives

Federal Reserve's Recent Rate Cut

The Federal Reserve recently implemented a significant cut in the baseline interest rate by half a percentage point, marking the first rate reduction in over four years. Before this cut, the last notable action was an emergency reduction to near-zero rates at the onset of the COVID-19 pandemic in 2020. Analysts had been anticipating this move, and it demonstrates the Fed's shift in priorities, focusing on stimulating the economy rather than solely combating inflation. The Fed's dual mandate—to maintain price stability while maximizing employment—has led to this essential adjustment in response to emerging economic conditions.

Intro

2min

The Evolution of Interest Rates Amidst Economic Turmoil

2min

Navigating Economic Balances: The Fed's Recent Rate Cut and Its Implications

5min

Impact of Fed Rate Cuts on Markets and Industries

12min

Home Affordability Challenges

6min

Navigating Interest Rate Projections

7min

Innovative Approaches to Monetary Policy and Forward Guidance

3min

The Fed’s recent rate cut signaled something clear about the US economy, but what are they trying to say? With a bolder rate cut than many of us expected, homebuyers, business owners, and real estate investors are seeing the light at the end of the high-rate tunnel, where borrowing money and buying houses could come at a lower cost. But with markets already anticipating a rate cut, did the recent cut even really matter?

Today, Federal Reserve reporter from The New York Times, Jeanna Smialek, shares her thoughts on what the Fed move meant after studying them full-time for over a decade. Jeanna believes that the Fed feels confident, even if this recent rate cut was overdue. Inflation has seen a substantial dropoff, but on the other hand, unemployment is rising, and Americans are getting nervous. Did the Fed move fast enough?

Jeanna also shares the future rate cuts we can expect from the Fed, with more potentially coming this year and a sizable series of cuts already lined up for 2025. How significant will the cuts be, and will they be enough to stop unemployment from getting out of control? How will rent prices and home prices move due to more rate cuts? We’re answering it all in this episode!

In This Episode We Cover

The Fed’s recent 0.50% rate cut explained and their forecast for 2025 rate cuts

The signal the Fed is sending by making a bigger rate cut (and preparing for more to come)

Why the Fed decided NOW was the time to finally cut rates (and whether it was too late)

Inflation updates and good news for the slowing of growing prices

Housing affordability and whether or not these rate cuts will help homebuyers/renters

And So Much More!

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