The Federal Reserve’s recent quarter-point interest rate cut marks the start of a new monetary easing cycle aimed at supporting the U.S. economy amid signs of slowing growth. This first reduction in nine months is significant, reflecting the Fed’s shift in focus towards preserving employment while managing inflation.

The US stock futures advanced and Treasury yields fell as markets digested the news, signaling cautious optimism amid uncertainty. This article explores how the Fed’s rate move impacts the economy and how US markets have responded.

Why the Fed Cut Rates?

The Fed’s 0.25% rate cut lowers the benchmark lending rate to a 4.00-4.25% range, the first adjustment since December 2024. This action is designed to stimulate economic growth by making borrowing cheaper for consumers and

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