Mumbai, 19 Sep 2024 (Commoditiescontrol):In a strategic move to rejuvenate economic momentum, the Federal Reserve has announced a significant 50 basis point cut in its key interest rate, setting the new target range at 4.75% to 5%. This reduction, the first since 2020, is designed to lower borrowing costs, thereby encouraging consumer spending and business investment. By making loans more affordable, from mortgages to auto loans and credit cards, the Fed aims to bolster employment and alleviate the economic drag caused by previously higher rates.
Impact on Commodity Markets: The rate cut could lead to a dual-edged impact on commodity markets. On one hand, cheaper financing may boost consumer spending and demand for commodities, potentially driving up prices. On the other hand, a lower interest rate tends to weaken the dollar, making dollar-priced commodities more attractive to international buyers, which could further lift commodity prices.
(By Commoditiescontrol Bureau; +91-9820130172)
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