As expected, the Fed cuts rates by 50bps (a nearly unanimous decision, with only one dissenting vote), and the dot plot signals a total of 100bps in rate cuts for the year. The Fed’s basic argument for this decision is that they want to bring monetary policy to neutral at a reasonably fast pace, in a context where progress on inflation is evident, and therefore, there’s no need to continue putting downward pressure on aggregate demand. To reinforce this, Powell explicitly said in the press conference that the economy is solid and that the Fed’s current focus is on ensuring that growth and employment continue to perform well.

Read the Macro Update for September 2024

Alantra

Alantra is an international financial services firm with over 600 professionals representing 35 nationalities across 24 offices. Founded in 2001, Alantra provides alternative asset management, private capital and financial advisory services to companies, families and investors operating in the mid-market segment.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.