TechFlow News — On Wednesday, September 18, the Federal Reserve announced after its Federal Open Market Committee (FOMC) meeting that the target range for the federal funds rate would be lowered from 5.25% to 5.50% down to 4.75% to 5.00%, a 50-basis-point cut. This marks the Fed's first rate reduction since it began its tightening cycle in March 2022. From March 2022 to July of last year, the Fed raised rates 11 consecutive times over little more than a year, hiking a cumulative 525 basis points. Since then, it held rates steady across eight straight meetings, maintaining them at their highest level since 2001.
The Fed has now launched a new easing cycle—the first rate cut in four years—and what excited markets even more was this unusually large initial cut. Financial markets reacted sharply: U.S. stocks surged briefly, the yield on the 10-year Treasury note dropped from above 3.69% to below 3.64%, turning negative on the day. Gold prices jumped about $20 per ounce, and the U.S. dollar index fell by 40 points.
