Fed Cuts Interest Rates, But Could Press Pause on Downward Trend

David Deem
714-997-3486
Dave@DeemTeam.com


By Liz Dominguez


Last Wednesday, the Fed announced another anticipated interest rate cut, the third since July, and again by a quarter point to the 1.50 percent to 1.75 percent range.

The Fed will continue to watch the economic landscape, which it says has a "strong labor market" and "activity that has been rising at a moderate rate," and expects to proceed as planned to sustain growth.

"We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the state of the economy remains broadly consistent with our outlook," Federal Reserve Chairman Jerome Powell told reporters at a post-meeting press conference.

There could be a shift in future policy, however—wording removed from the Fed's statement indicates it may pause rate cuts.

Consumer sentiment for rate cuts is largely positive, according to a new Fed Rate Survey from WalletHub. Ahead of the Fed's announcement, 71 percent said they support a cut, with 57 percent believing it would benefit the economy.

The report suggests the rate cut will not significantly impact loan originations, as historical data shows the Fed's rate hikes have more influence than interest rate cuts. It does, however, find that 40 percent of people will reportedly be more confident in the economy following the rate cut.

"I do not see a recession coming in the next several months because the economy still appears to be doing quite well. In fact, a bigger risk right now is consumers panicking without reason, especially ahead of the biggest retail season of the year," said WalletHub CEO Odysseas Papadimitriou.

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Location: Orange, CA, USA

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