The US Federal Reserve cut the key rate more than traders expected and plans to cut it again later this year

On September 18, the US Federal Reserve System (which acts as the central bank) cut the key rate by 0.5% for the first time since 2020 (although analysts had expected a decrease of 0.25%), starting "the easing of monetary policy with a larger than usual , reducing borrowing costs." In July 2023, the Fed raised the rate to 5.25-5.5% and kept it high to reduce inflation from a 40-year high (caused by the infusion of funds during the covid period) to the target.

Fed officials reported that inflation should decrease to 2%. At the same time, it is planned to reduce the base rate by another 0.5% by the end of the year, by 1% in 2025, and by 0.5% in 2026.

The head of the Federal Reserve, Jerome Powell, expressed confidence that "the revision of the policy position can support moderate employment growth and a decrease in inflation to 2%."

The Fed will continue to reduce its holdings of Treasuries, government debt, and mortgage-backed government securities.

On this news, shares of American companies rose, and the dollar fell against other currencies. A decrease in the cost of loans will allow for an increase in speculative capital, which will lead to an increase in the price of shares and exchange futures for agricultural products and raw materials.