Holdcroft Wealth Insights: Fed Lowers Interest Rates by 0.5%: What It Means for You
Welcome to the second edition of my newsletter.
The Federal Reserve has announced a 0.5% interest rate cut, marking a significant move aimed at boosting economic growth and easing financial pressures. While the rate reduction is substantial, it has been widely anticipated for some time. Market expectations were leaning toward this outcome, with the CME Group's FedWatch Tool staking higher odds on a 50 basis point cut than a smaller 25 basis point reduction. As such, today's action from the Fed is not unexpected.
For consumers, this cut means lower rates on personal and home loans, making borrowing more affordable. However, savers might see lower returns on savings accounts, money market funds and CDs.
For businesses, cheaper capital could encourage expansion, investment, and hiring. Small businesses, in particular, may find loans more affordable, providing a boost to growth and operations.
The Fed's decision reflects a strategic effort to support economic momentum, particularly in the face of economic uncertainty. By making borrowing more accessible, the goal is to stimulate consumer spending and business investment, strengthening the broader economy.
Key events to watch:
- US Real GDP data release on Thursday 9/26
- US Core PCE Index inflation data release on Friday 9/27
- US Unemployment rate data release on Friday 10/4
- US CPI index inflation data release on Thursday 10/10
- Q3 Corporate Earnings beginning in October
I’ve attached a short video of Jeffrey Roach, Chief Economist at LPL Financial to give you some additional ideas on what to expect in the near term.
If you have any questions or would like to review your financial strategy, don’t hesitate to give me a call or schedule a meeting. Also, if you know anyone who might benefit from this information, please feel free to share it with them.
Thank you,
Rob Holdcroft
Featured video:
Expect Interest Rate Volatility as the Fed Pivots
See it HERE.
Rob Holdcroft, MBA
Financial Advisor
Holdcroft Wealth Management
Direct : 814-441-5970
