Category: USD (US Dollar)

The U.S. Federal Reserve is on Wednesday heading for its first interest rate cut since the onset of the Covid-19 pandemic — and despite the move being widely forecast, global investors are braced for impact.

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low.

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions.

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy.

The Federal Reserve cut U.S. short-term borrowing costs on Wednesday by a bigger-than-usual half percentage point, a watershed moment that should start to ease some of the financial pressures everyday consumers have felt over the two and a half years that the central bank has battled with high inflation.

The US central bank lowered interest rates for the first time in four years on Wednesday. The much anticipated move will influence mortgages, credit card and saving rates for millions of people in the US – and even around the world. The Federal Reserve reduced the key lending rate by…

The dollar initially trading lower following the Fed announcement, but pared those losses after Chair Jerome Powell finished his press conference.

The Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent.

The Fed’s key lending rate – what it charges banks to borrow – sets a base for what companies charge people in the US for loans, like mortgages, or other debt, like unpaid credit card balances.

That rate has hovered around 5.3% for more than a year, the highest level since 2001, since jumping from near zero at the start of 2022.

The United States dollar is one of the most widely utilized currencies around the globe, both as an official currency and for international trade outside US borders. The dollar is divided into 100 units called pennies or cents.