3rd Nov 2024 10:38
(Alliance News) - The US Federal Reserve is likely to cut its benchmark rate by 0.25 points next week, the Financial Times reported on Sunday morning.
The Federal Open Market Committee will announce its next interest rate decision on Thursday, two days after polls close in the US presidential election. At that point, the results may still be unknown.
Regardless, the FT's Colby Smith writes, officials are likely to opt for a quarter-point reduction, in "a resumption of a more traditional pace of easing after September's larger than usual half-point cut". This would reduce the federal funds rate to a new target range of between 4.5% and 4.75%.
A cut would be underpinned by "evidence that the US economy is growing solidly - buoyed by a healthy labour market and consumers who just keep spending - even as inflation falls", with GDP rising 2.8% on-year in the third quarter.
However, the rosy picture was slightly clouded by Friday's jobs data which "showed payroll gains of only 12,000 for October, marking the worst month in Joe Biden's tenure as president".
The FT noted that the figures were "skewed by two hurricanes that hit the US south-east around the same time the Bureau of Labor Statistics was beginning to collect the data", also citing worker strikes.
By Emma Curzon, Alliance News reporter
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