What does the US rate cut mean for investors?

美国降息对投资者意味着什么?

The Bulletin with UBS

商务

2024-09-23

16 分钟
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单集简介 ...

Our panel reflects on the US Federal Reserve decision to cut interest rates for the first time since March 2020. Paul Donovan, chief economist in UBS Global Wealth Management and Kiran Ganesh, managing director in the UBS Chief Investment Office, discuss the 50 basis-point reduction, consider the macro picture and explain what this week’s move means for investors. See omnystudio.com/listener for privacy information.

单集文稿 ...

  • Hello and welcome to the Bulletin with UBS on Monocle Radio.

  • Each week, the sharpest minds and freshest thinkers in finance take you beyond the numbers and hype right to the heart of the big issues of the day.

  • This week we're reflecting on recent moves by the US Federal Reserve to cut interest rates for the first time since March 2020.

  • We'll ask our panelists from UBS Global Wealth Management for their reaction to the 50 basis point reduction.

  • We'll look at the macro picture and we'll delve in more detail into what this week's moves could and should mean for savvy investors.

  • We start with our good friend Paul Donovan, chief economist in UBS Global Wealth Management.

  • Paul, always a pleasure to welcome you.

  • Give us your reaction, if you will.

  • Paul, to Wednesday's 50 basis point cut from the Fed.

  • It was very much within the bounds of expectations, I think it's fair to say.

  • But what did, what did you make of the announcement itself and what Fed Chair Powell had to say about it?

  • I think we had a rather peculiar situation.

  • So the overwhelming majority of economists were looking for a quarter point cut because they're saying there's nothing particularly wrong with the US Economy.

  • Traders who get a little bit more excited about such things were more inclined to look for half a point cut.

  • And of course, that's what we got.

  • It is a bit peculiar, though, because half point rate cuts are normally conducted when there's an economic emergency and there's no economic emergency in the United States at the moment.

  • You are operating pretty much at full employment.

  • You've got rising real wage growth, inflation is under control, consumer spending is perfectly adequate.

  • So in that sense, it was very, very surprising that the Fed felt the need to cut by 50.

  • Now the Fed has been late in cutting rates.