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US Federal Reserve convenes amid rising expectations of a rate cut


US Federal Reserve convenes amid rising expectations of a rate cut

us federal reserve decision
Photo: Andrew Harnik/AP

The US’s top central bankers convene today in Washington, DC, for two days of talks ahead of Wednesday’s interest rate announcement. Many analysts believe that the Federal Reserve will slash the interest rate by 25 basis points, bringing it down to the 1.75%-2% range.

President Donald Trump has applied pressure on Chair of the Federal Reserve Jerome Powell to cut the rate, pointing to monetary easing in China and a desire to counter economic stagnation. Many believe that increased investment, which a cut could bring, is necessary to counter looming economic crises in European countries and the US.

The Federal Reserve may decision to must deliver lower interest rates because stock markets have anticipated a cut and adjusted their investment patterns to the predicted outcome. Were a cut not delivered, the market could slip sharply.

Following the European Central Bank’s rate cuts earlier this month, rhetoric has heightened that the dollar and US manufacturing sector are weakening. As the EU and Japan struggle to maintain growth, expect the US to follow with similar cuts to spur investment.

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