Fed cuts interest rates by 0.25%, stocks, gold prices plummet

ANTD.VN - The Fed cut interest rates for the third consecutive time this year, by 25 basis points (0.25%) and sent a message of careful consideration for subsequent cuts.

On December 18 (early this morning Vietnam time), as predicted, the US Federal Reserve (Fed) decided to continue easing monetary policy. Accordingly, the US reference interest rate decreased by another 25 basis points (0.25%), to 4.25-4.5%.

This is the third consecutive time the US central bank has cut interest rates. The previous two cuts were by 0.5% and 0.25%, respectively.

Fed cuts interest rates for third consecutive time

Assessing the national economy, the Federal Open Market Committee (FOMC) of the Fed said that economic activity continued to grow solidly. Unemployment remained low and inflation increased moderately. The Fed said it would carefully consider upcoming data, both the outlook and risks, to make a decision on interest rates.

These comments from the Fed raised doubts that the Fed could stop cutting interest rates at its next meeting in late January 2025.

Next year, Fed officials expect only two 25 basis point rate cuts. They also raised their inflation forecast for Donald Trump’s first year in office to 2.5% from 2.1%, above the Fed’s 2% target.

The forecast fell on the side of monetary policy hawks - those who do not want interest rates to fall further. After this message, the US stock market immediately turned sharply down. The Dow Jones index fell 2.65%; S&P fell 2.95%; NASDAQ fell 3.68%.

The world gold price also plummeted. Each ounce lost 20 USD in just 10 minutes and by the end of the session had dropped 62 USD to 2,583 USD/ounce. Currently, this precious metal is recovering slightly and is trading around 2,595 USD/ounce.

Source: https://www.anninhthudo.vn/fed-giam-lai-suat-025-chung-khoan-gia-vang-lao-doc-post598766.antd