Fed cuts benchmark rate to 3.50%-3.75% range

Summary

The Federal Reserve has lowered the benchmark interest rate by 25 basis points to a range of 3.50%-3.75%, marking the third consecutive rate cut this year, totaling a 75 basis point reduction.QQ News+ 3

Impact Analysis

So the Fed’s decision to cut rates again, bringing them down to 3.50%-3.75%, is a clear signal of their dovish stance, but it’s not as straightforward as it seems. The timing is interesting—right before the year’s end, suggesting they want to cushion any potential economic slowdown heading into 2026. However, the internal dissent, with 7 officials opposing, indicates a lack of consensus on the path forward, which could lead to volatility as markets try to interpret future moves. The market’s reaction, with U.S. Treasuries strengthening and equities rising, shows relief but also a cautious optimism. The dovish tone might support equities in the short term, but the mixed signals could mean increased volatility, especially in the bond market. For portfolios, this might be a time to look at interest rate-sensitive sectors and consider hedging against potential rate hikes if inflation pressures resurface.HK MingPao+ 3