US Dollar Index Rises as Fed's Aggressive Rate Cut Boosts Confidence

Mumbai, 19 Sep 2024 (Commoditiescontrol):The US dollar index surged above 101.3 on Thursday, continuing its rebound from a 14-month low following the Federal Reserve's decision to implement a substantial 50 basis point rate cut. This marks the central bank’s first rate reduction since the onset of the Covid-19 pandemic, signaling a bold move to sustain economic stability amid inflationary pressures.

Federal Reserve Chair Jerome Powell emphasized that while the Fed is confident inflation is approaching its 2% target, the central bank remains cautious about aggressively easing policy. Powell made it clear that the 50 basis point cut does not represent a new pace of rate reductions, but rather a necessary intervention to prevent a slowdown in the labor market. He also dismissed the likelihood of a return to ultra-low interest rates, noting that the neutral rate is expected to remain significantly higher than in previous economic cycles.

(By Commoditiescontrol Bureau; +91-9820130172)