Finance & economics | Buttonwood

The Federal Reserve’s interest-rate cuts may disappoint investors

Jerome Powell could still surprise on the hawkish side

Illustration of a silhouette of a person in profile wearing a party hat with "0%" on top, blowing a party horn, against a bright pink background
Illustration: Satoshi Kambayashi

The longed-for moment has at last arrived. For two and a half years, ever since America’s Federal Reserve embarked on its fastest series of interest-rate rises since the 1980s, investors had been desperate for any hint of when it would reverse course. But by the time Jerome Powell, the central bank’s chair, announced the first such reduction on September 18th, the debate among traders was no longer “whether” but “how much”. Weeks beforehand, at an annual gathering of central bankers in Jackson Hole, Wyoming, Mr Powell had already more or less confirmed that a cut was imminent. In the event officials plumped for a jumbo-sized chop, of 0.5 percentage points, to between 4.75% and 5%.

Explore more

This article appeared in the Finance & economics section of the print edition under the headline “Party pooped”

From the September 21st 2024 edition

Discover stories from this section and more in the list of contents

Explore the edition

More from Finance & economics

Solar panels installed on the roof of a building at Skardu in Pakistan's Gilgit-Baltistan region.

Cheap solar power is sending electrical grids into a death spiral

Pakistan and South Africa provide a warning for other countries

People walk at Zaryadye park with the Kremlin and St. Basil's Cathedral in the background in Moscow, Russia.

Russian inflation is too high. Does that matter?

In a strong economy, price pressure can endure for a long time


illustration of a house cut in half diagonally, the lower corner being a bill.

Why you should repay your mortgage early

For the first time in decades, the arithmetic suggests settling housing loans


How AI will divide the best from the rest

Optimists hope the technology will be a great equaliser. Instead, it looks likely to widen social divides

The danger of relying on OpenAI’s Deep Research

Economists are in raptures, but they should be careful

Elon Musk is failing to cut American spending

DOGE has so far disrupted everything in government bar the deficit