The federal reserve has again become in softening mode after ten months to adopt a waiting approach on the American economy.
In a widely awaited decision on Wednesday, the US central bank reduced its interest rate for federal benchmark funds from 25 basic points to 4% to 4.25%, the lowest since December 2022.
The Fed recognized that economic growth in the first half of the year has “moderate” and that the labor market has “slowed down”.
The decision follows the growing signs that the American labor market began to decisively weaken, the last being the August employment report which showed the addition of only 22,000 jobs to the economy and the unemployment rate of 4.3%, the highest since 2021.
In addition to this data, the revisions of reports for previous months have shown that jobs had been created only before.
Added to that, there was a political pressure in the form of repeated criticism of President Trump on the Fed’s hesitation to act in the face of what he insists on the fact that he softened inflation.
The markets react
In the minutes that followed the drop in the rate, the price of Bitcoin (BTC) increased by around 1%.
The main American stock market indices – which have repeatedly stimulated records for weeks before the Fed move – also increased to the news.
The press conference after the meeting of the president of the federal reserve Jerome Powell begins in a few minutes and the markets will closely monitor what informed today’s decision as well as what the central bank will examine during future political meetings.
