US Federal Reserve cuts interest rates again as economic outlook remains uncertain
The US Federal Reserve cut interest rates by 25 basis points, marking its second reduction of 2024. This decision follows the recent election of Donald Trump as president, with Fed Chair Jerome Powell indicating that future rate cuts will depend on economic data.
Powell stated it is too early to assess how Trump's policies might affect the economy. Analysts warn that Trump's tax cuts and tariffs could increase inflation, potentially leading the Fed to halt its rate-cutting cycle sooner than expected, impacting global markets, including India.
The Fed's rate cut may attract foreign investment to countries like India, as lower US rates widen the interest rate gap. Meanwhile, the Reserve Bank of India is expected to consider these developments in its upcoming monetary policy meeting in December.