Federal Reserve Chairman Jerome Powell's news conference appears on a television screen on the floor of the New York Stock Exchange. AP
Federal Reserve Chairman Jerome Powell's news conference appears on a television screen on the floor of the New York Stock Exchange. AP

Wall Street edges lower after Fed delivers jumbo interest rate cut



US stock indexes edged lower on Wednesday in a volatile day of trading after the Federal Reserve began its latest easing cycle with an aggressive 50-basis point cut.

After the announcement, Fed chairman Jerome Powell said inflation has eased “significantly” over the past two years, allowing the central bank to now focus on protecting the US labour market and economy. The decision lowers the Fed's benchmark range from 5.25-5.50 per cent to 4.75-5.00 per cent.

“This recalibration of our policy stance will help maintain the strength of the economy and the labour market, and will continue to enable further progress on inflation as we begin the process of moving towards a more neutral stance,” Mr Powell told reporters.

The Fed's preferred inflation metric has fallen to 2.5 per cent since its peak rate at 7.1 per cent in 2022. Meanwhile, the unemployment rate has climbed to 4.2 per cent and average payroll gains have fallen to 116,000 over the past three months.

“The Fed is shifting from fighting inflation to preventing a downturn in the economy,” said Kenneth Kim, senior economist at accounting firm KPMG.

The Dow Jones Industrial Average fell 103 points to 41,503.10, although it is still near the all-time high it set on Monday. The S&P 500 closed 0.29 per cent lower, while the Nasdaq Composite dipped 0.31 per cent.

“Not an extraordinary end of day market reaction to what in can certainly be seen as a bit of a surprise,” said Art Hogan, chief market strategist at B Riley Wealth, adding that it was also difficult to gauge market reaction considering the news conference ended about 40 minutes before the closing bell.

Although a 25-basis point cut was predicted by most economists, futures markets placed the probability of the larger 50-basis point cut at about two thirds heading into Wednesday's decision.

Mr Hogan said the larger rate cut showed a strong signal that the Fed is determined to bring rates closer to the neutral rate “in a fashion that won't take as much heavy lifting by the end of the calendar year”.

Quarterly projections released by the Federal Open Market Committee showed it expects to reduce rates by a further 50 basis points in the final two meetings this year. The median Fed official forecast rates would be cut by another full percentage point in 2025.

Mr Powell denied that the central bank was behind the curve on cutting interest rates. A number of officials in July suggested they would have been open to a rate cut then.

“There's no sense that the committee feels it's in a rush to do this,” he said.

Treasury yields also experienced volatility, with the 10-Year Treasury edged up to 3.71 per cent as of 5pm ET. The two-year Treasury rose to 3.62 per cent.

“Markets had largely priced in what the Fed gave us. It allowed for some room for traders to take profits here given that it's already priced in to a significant degree. So a little bit of profit-taking,” said John Canavan, lead analyst at Oxford Economics.

Mr Canavan said there could be a corrective rise in yields during the near term, which could push down equities.

“But that's really just a short-term position more than anything, in my view, and the longer-term outlook is that the economy will remain on solid footing,” he said.

“The Fed will continue to ease, and the combination will continue to move Treasury yields lower over the next year, offering equities good support.”

The Central Bank of the UAE joined the Fed in cutting rates by 50 basis points on Wednesday. Central banks in England and Japan are expected to hold rates steady when they meet this week.

Cryopreservation: A timeline
  1. Keyhole surgery under general anaesthetic
  2. Ovarian tissue surgically removed
  3. Tissue processed in a high-tech facility
  4. Tissue re-implanted at a time of the patient’s choosing
  5. Full hormone production regained within 4-6 months
German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Revibe%20%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202022%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Hamza%20Iraqui%20and%20Abdessamad%20Ben%20Zakour%20%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%20%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Refurbished%20electronics%20%0D%3Cbr%3E%3Cstrong%3EFunds%20raised%20so%20far%3A%3C%2Fstrong%3E%20%2410m%20%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EFlat6Labs%2C%20Resonance%20and%20various%20others%0D%3C%2Fp%3E%0A
The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Brief scores:

Everton 2

Walcott 21', Sigurdsson 51'

Tottenham 6

Son 27', 61', Alli 35', Kane 42', 74', Eriksen 48'​​​​​​​

Man of the Match: Son Heung-min (Tottenham Hotspur)

Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
  • Stay invested: Time in the market, not timing the market, is critical to long-term gains.
  • Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
  • Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
 
 
THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

Director: Laxman Utekar

Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna

Rating: 1/5

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Directed by: Craig Gillespie

Starring: Emma Stone, Emma Thompson, Joel Fry

4/5

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

Indoor cricket in a nutshell

Indoor cricket in a nutshell
Indoor Cricket World Cup - Sept 16-20, Insportz, Dubai

16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership

Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.

Zones

A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full

The biog

Age: 32

Qualifications: Diploma in engineering from TSI Technical Institute, bachelor’s degree in accounting from Dubai’s Al Ghurair University, master’s degree in human resources from Abu Dhabi University, currently third years PHD in strategy of human resources.

Favourite mountain range: The Himalayas

Favourite experience: Two months trekking in Alaska

Updated: September 18, 2024, 10:18 PM