Stepwise Risk Outlook: What We're Watching Today, September 20, 2024

What We're Watching Today is 1,144 words and a 7-minute read.

Global: Impact on the global economy of the US Federal Reserve rate cut

The Fed's decision to unwind its most recent economic tightening cycle is expected to be felt around the world.

Our Take: Central banks around the world have been waiting to see the size of the rate cut, as it signals the latest US assessment on taming inflation and risks of recession. The jumbo cut will push more liquidity into the market and reduce pressure on other central banks to maintain higher rates. A soft landing for the US economy bodes well for the global economy, as a strong US economy can lift other economies. Borrowing costs in dollars will go down. Lower interest rates could also weaken the dollar, pushing up the price of other commodities, such as gold.