After a long wait, the question regarding the results of the latest FOMC meeting has finally been answered, although many have already expected a script for September.
The Federal Reserve (Fed) early this morning implemented the first interest rate cut since the last time it did so in December last year.
As expected, the interest rate was lowered by 25 basis points from 4.50% to 4.25% with further cuts signaled to follow.
Projections from FOMC members indicate that there will be two more interest rate cuts at the remaining meetings at the end of 2025.
Speaking after the interest rate announcement, Fed Chairman Jerome Powell still emphasized the risks to the labor market in the United States (US) with concerns that labor growth is no longer sufficient to maintain the unemployment rate.
However, Powell stated that the central bank does not need to rush to continue easing policy and that the latest data that will be presented after this will certainly be the main driver.
The reaction of price movements has also surprised investors with the uncertainty of direction displayed in the trading of major currencies.
The US dollar weakened significantly during the initial reaction to the interest rate decision, but did not wait long to 'reverse' and strengthen again towards the closing trade of the New York session.
This 'roller-coaster' situation of prices is actually not a surprise to market analysts who explain that the uncertain movement can occur while market players are still digesting the results of the central bank meeting.
For long-term movements, the US dollar is considered to be moving under pressure after it is clear that the Fed is now continuing its policy easing measures.
