The federal reserve is going to meet next week for discussing and solving the problem of interest rates cut. There are already many speculations going on that Feds might announce about reducing the rate of interest. However, there are still three options Federal Reserves have which they can use before taking the final decision. The first option which Feds has is that they can hold the interest rates, and this decision is still under scepticism. There are many reports which show that this time Feds might be able to cut interest rates.
The central bank is trying to make things useful because of an ongoing trade war between US-China. The trade war which Trump administration started a few months ago has taken a toll on the US economy. Now because of such geopolitical environment interest rates are going to get cut down. Jeremy Powell has always been sceptical about Trump’s economic policies and because of which both of them had a strong disagreement.
Another option which the Fed has is that they can cut interest rates by twenty-five to fifty points, which is most likely going to happen. The wall street is closely watching this meeting of Feds and investors are looking to get a good result. Investors a few days ago, gave a positive response on the market about speculation regarding the Fed’s interest cuts. Last option which Feds has is hiking interest rates, and that’s most probably not going to happen. Feds in previous quarters took this decision, which even made angry to the US President Donald Trump. During the ongoing trade war with China, the US suffered a lot economically still Feds didn’t cut interest rates at that time. In this upcoming meeting, it’s most likely that the Fed is not going to hike interest rates. The US economy is currently going through a dense phase, and it requires help from Feds.