In what markets judged to be a line-ball decision, the Federal Reserve’s Federal Open Markets Committee (FOMC) decided to reduce the target range for the policy interest rate by 50 basis points (bps) to 4.75 – 5.00 per cent.

Markets had been debating the relative merits of a smaller 25 bp cut compared to the 50 bps that the FOMC ultimately instituted.

The decision to opt for the higher quantum of reduction reflects a view that the inflation risks have diminished while labour market conditions are at some risk of deterioration.

Read Stephen’s ‘On the other hand’ here

Stephen Miller

Stephen Miller is GSFM’s market strategist. His expertise in international economic and policy analysis, as well as domestic and global economic and financial market developments, has resulted in him becoming a regular commentator on central banks, rates and inflation.

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