The Fed has lowered interest rates by 0.5 points, thus aligning with the market, which anticipated a roughly 70% probability of a 50 basis point cut. As a financial institution noted this morning, “the risk for credit markets is that a 50 basis point cut may be interpreted as an emergency measure. Consequently, the gradual approach and soft landing that have benefited this type of asset could be disrupted. On the other hand, the Fed also risks that market pricing could become even more aggressive for the rest of 2024, necessitating a hawkish shift in communication.”
Fed cuts interest rates by 0.5 points
