Fed Signals Slower Rate Cuts: Market Reacts

The Federal Reserve cut interest rates by 25 basis points and signaled a slowdown in future cuts, impacting markets. The Dow experienced its longest losing streak since 1974. While Fed Chair Jerome Powell reassured the economy's strength, global markets saw mixed results, with varying responses across stocks, bonds, currencies, and commodities.

Wall Street experienced a downturn on Wednesday following the Federal Reserve's decisive interest rate cut, which was accompanied by a signal to slow the pace of cuts next year. This resulted in a stronger dollar and a reversal in the Dow's upward trend.

The Fed's policy shift caused a significant reaction in the financial markets. Treasury yields rose, and the Dow saw its longest losing streak since 1974. The Federal Open Market Committee's anticipated cut of 25 basis points was followed by a reduction in projected future cuts from four to two by the end of 2025, hinting at a pause in January.

In a press conference, Fed Chair Jerome Powell emphasized economic strength and approaching inflation targets, signaling no immediate hikes. Meanwhile, global stocks, currencies, and commodities experienced mixed results as markets digested the news. Despite some volatility, Powell maintained optimism about the U.S. economy's resilience.

(With inputs from agencies.)