American Central Bank Chairman Geom Powell
For the first time in the year 2025, there has been a lot of good news from America. The US Central Bank has cut the policy interest rates by 25 basis points after 9 months. After which the range of interest rates of American Central Bank has increased from 4 percent to 4.25 percent. Earlier, the policy rate was last seen in December 2024. Then Fed had cut 25 basis point rates. In the year 2024, Fed was rate of 1 percent. After this decision, there is a mixed effect in the US stock market. On the other hand, there is a decline in gold prices in foreign markets.
Talking about the dollar index, there is a decline. The Fed Reserve was under pressure for a long time to cut interest rates. While on the one hand, American President Donald Tram was pressurizing the Fed. On the other hand, demand was being made by the general public to make the debt cheaper. But after Trump’s tariff program, inflation in America was estimated to increase. But so far, there is no specific concern in the data of inflation which have come from America. Due to which Fed has cut the interest rates by 25 basis points.
There will be two more cuts
The chairman of the US Central Bank indicated that more interest rates could be cut twice in the current year. This means that in the policy policy meeting to be held in November and December, the Fed can cut 25-25 basis points i.e. 50 basis points. At the Fed meeting, a member Governor Miran Dysent recommended a cut of 50 basis points this time. But the majority in the panel was 25 basis points. After which it was decided that interest rates will be cut by 0.25 percent. According to the fed signs, there may be a cut of 75 basis points in the current year.
Fourth cut in a year
However, in the last one year, the American Central Bank has cut four times. On 18 September 2024, Fed had cut a 50 basis point on 18 September 2024. Then a cut of 25-25 basis points in the months of November and December. This means that the Fed had cut interest rates by one per cent in three consecutive months. After that, after taking a break of 9 months, now the interest rates have been cut again. This means that it has cut by 1.25 percent in a year. If the Fed reduces 50 basis points by December, then the range of policy rate will come from 3.50 percent to 3.75 percent. According to the signs of the fed, the rate will be cut only once in 2026 and 2027.