Stock Market Sell-Off: Will the Federal Reserve Soon Step in With Interest Rate Cuts?
Things have gone from bad to worse in a hurry on Wall Street, with the S&P 500 (SNPINDEX: ^GSPC) joining the Nasdaq Composite (NASDAQINDEX: ^IXIC) in correction territory on Thursday. The leading market index has fallen 10.1% in just three weeks' time. Despite a two-plus-year bull market that lifted stock valuations to lofty elevations, market strategists came into 2025 with generally positive outlooks. However, weakening economic data and President Donald Trump's trade war have thrown the market into disarray. Investors are increasingly concerned about the possibility of a recession or even stagflation.In light of all these fresh economic headwinds, it's natural to wonder: Will the Federal Reserve resume cutting interest rates soon to provide some stimulus?The Federal Reserve began cutting interest rates last year after its previous rate-hiking campaign succeeded in significantly reducing the U.S. inflation rate. With its concerns shifting toward the impact of higher interest rates on the labor market, the Federal Open Market Committee (FOMC) cut the benchmark federal funds rate by 50 basis points (half of a percentage point) at its September meeting, followed by a cut of 25 basis points at its November meeting.Continue reading
Things have gone from bad to worse in a hurry on Wall Street, with the S&P 500 (SNPINDEX: ^GSPC) joining the Nasdaq Composite (NASDAQINDEX: ^IXIC) in correction territory on Thursday. The leading market index has fallen 10.1% in just three weeks' time. Despite a two-plus-year bull market that lifted stock valuations to lofty elevations, market strategists came into 2025 with generally positive outlooks. However, weakening economic data and President Donald Trump's trade war have thrown the market into disarray. Investors are increasingly concerned about the possibility of a recession or even stagflation.
In light of all these fresh economic headwinds, it's natural to wonder: Will the Federal Reserve resume cutting interest rates soon to provide some stimulus?
The Federal Reserve began cutting interest rates last year after its previous rate-hiking campaign succeeded in significantly reducing the U.S. inflation rate. With its concerns shifting toward the impact of higher interest rates on the labor market, the Federal Open Market Committee (FOMC) cut the benchmark federal funds rate by 50 basis points (half of a percentage point) at its September meeting, followed by a cut of 25 basis points at its November meeting.
