Ferds decision about cutting interest rates has been one of the most controversial topics on the wall street. Many speculations were going on about Fed’s decision regarding cutting interest rates. However, now Jeremy Powell has put a stop on it by announcing a precise cut of 0.25 percent in interest rates. After having a general meeting, the federal reserve bank has finally decided to lower interest rates for the first time since 2008. Since the last ten years, the Fed has always been hard about interest rates policies. They haven’t changed or lowered the interest rates in the previous few quarters also.
USA is already going through a major trade war with China, which is taking a toll on the US economy. After taking considerable time, Feds have finally come up with a solution to stop the possible recession. Many speculations were going on that current geopolitical situation in the USA might take the country into recession. However, the Fed has taken authority into its hand by lowering interest rates, which were demanded by Trump many days ago.
When Trump started a trade war with China, he wanted full support from feds who did not show that much interest in it. However, Trump publicly criticized Jeremy Powell and Feds for not supporting and cutting interest rates. USA a few months ago was going through a rough period after banning Chinese goods and during that time, Trump needed support from fed. Fed at that time did not consider cutting rate of interest as that much necessary, but now they have reversed such decision. Feds have cut interest rates by a low margin of 0.25 percent, which is going to leave a positive impact on the US economy for some time.
