Fed cut rates again

//Fed cut rates again

Fed cut rates again

CNBC: Fed approves quarter-point rate cut but is divided on further action this year

Article published: Sep 18, 2019

IB Economics syllabus: Macroeconomics (monetary policy)

The FED (U.S. Central Bank) has cut the interest rates again by 0.25%. “The implications of global developments for the economic outlook as well as muted inflation pressures” were given as the reason for the move. This is a direct reference to the trade war between the United States and China which negatively affects economic growth and while this is a form of expansionary monetary policy, Jerome Powell (the chairman), said “these cuts [are] a “midcycle adjustment” and not part of a more aggressive strategy to drive rates lower” – in other words, it is to prevent any further fall in U.S. economic growth but the Fed is not expecting a recession as this is just a “midcycle adjustment” (referring to the business cycle when the economy gets closer to its peak).

Source of image: CNBC video

Do you need a little boost with IB Economics?

Get help from an examiner: check out private lessons.

Looking for more articles?

Click here.

Will you pass the IB Exams???

Test your knowledge with the below quiz.

I’m taking the micro quiz
By | 2019-09-30T21:21:05+00:00 September 30th, 2019|Macro|Comments Off on Fed cut rates again

About the Author:

My name is Daniel Szekely and I work as an IB Economics tutor, examiner and teacher. Having earned an MA degree in Economics at the University of Aberdeen, I started my career as a financial analyst at Morgan Stanley, one of the largest investment banks of the world. Yet, despite the promising career prospects of the banking industry, I decided to make a larger social impact by becoming a teacher. Currently, I teach IB Economics at SEK Budapest International School and have been an examiner for over 6 years. I started EconDaddy as a simple blog to share great articles with my students and others taking IB Economics around the world to use for their commentaries. Being a practicing IB Economics tutor, I have first hand insight into the most common mistakes of students, so the EconDaddy blog now also provides exam and commentary writing tips.

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close