FED Jerome Powell met today and lowered the rates by .25 points bring it to 4.25 . The meeting contained alot of uncertainty in the of the state of inflation and the US economy. The Fed kept to there plan of lowering rates but since inflation increased since there last meeting there were debates on wether or not they should even cut rates. The stock market hates uncertainty and because the FED changed there 2025 position of 4 rate cuts to possibly 2 that created panic and may have caused the stock market to take a dive today.
The Fed changing there plan from 4-2 shows that they are not sure if they can tame inflation meaning prices will continue to go up and longer times for higher interest rates. The lower the interest rate the easier it is to acquire money and the cheaper your debt becomes . People feel more wealthy and are able to invest more. The higher the rates the more restrictive it is to obtain loans and the more expensive your debt is. Which slows down growth.
EXPECT MORE LAYOFFS
Since the FED predicts they will only have 2 rate cuts next year 2025 , this means longer time in higher rates. This makes debt more expensive for everyone including companies. Companies then will go through layoff to save money which is difficult to obtain in this economy . The consumers are not spending enough and debt is remaining expensive. So expect more layoff next year for companies who were holding off.
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