so the US Fed cutting interest rates by 25 basis points how was the market
reacting to the feds first interest rate cuts since the financial crisis in 2008
water analysts saying let's go live to Wall Street
Georgina's live is angela moon senior correspondent for Thomson Reuters New
York good afternoon to you Angela good morning to you and you first off how is
the market reacting to Fed Chairman Jay Powell the latest rate cut of 25 basis
points I know that there had been speculation that it would be 15 basis
points well conn-young some major moves we saw on Wall Street today obviously US
stocks closed sharply lower with the Dow Jones Industrial Average sinking to a
triple digit loss that was the biggest one-day fall since May 31st so obviously
a very big move here and the S&P and Nasdaq both losing over 1 percent and
this is because many investors were disappointed that the rate cut wasn't
bigger and that the Fed didn't firmly signal more reductions to come in coming
quarters you know some investors were actually out over their skies and we're
expecting chairman Powell to be extremely dovish and that didn't come
from today's press conference right let's go back to Jay Powell's remarks at
the press conference just a few hours ago he said there really are two
portions to think about this first being the US economy is still looking pretty
good data since the June meeting we know has shown that but that they need to cut
rates because of the issues abroad now what does he mean by that really I mean
it makes us wonder what his next step is going to be having said that right like
you said conn-young with the u.s. unemployment still at a 50-year low and
inflation sort of subdued the feds focus today was rather on the potential
threats to the record 11-year economics pension post by president Trump's trade
policies and the resulting slowdown in global economic growth the rate cut
today was really all about feds efforts to cushion the economy from the possible
effects of president's trade war with China so it's really all eyes are
focused on how the the trade talks go with China at this point
right I want to pick up where you left off well use China no we got those
comments from Janet Yellen a few days ago talking about the headwinds that are
forming outside of the US how much of that concern that we're seeing from
coming from the Fed has to do with this big trade overhanging if there is in
fact some kind of a deal reached between US and China now we know in September
could we perhaps see the Fed shift well Sharon Powell at the news conference
today after the decision was released called the rate cut as a mid cycle
adjustment and did it really rule offer more reductions but he also said it was
not the beginning of sort of this long series of rate cuts that that we've seen
during the financial crisis because that path is only followed at times of mors
to be severe economic distress so it's really uncertain at this point and and
the one thing that we do know is that Wall Street dislikes uncertainty more
than anything so that remains to be seen but the markets see a 71 percent chance
in the Fed cutting rates again in September by 25 basis points so hopes
are definitely still there among investors absolutely you know Angela how
two analysts there foresee this rate cut or even perhaps a more to come in the
next month like you said impacting the global economy well the Fed officials
see tighter linkages than in the past between the US and global economies and
it's prompting new questions over how high they can raise domestic rates above
those in other advanced economies which have lower or even negative rates some
officials also believe that the lower rates are needed now to provide a boost
for an economic outlook darkened by the global manufacturing soot saloon and a
recent escalation in you know trade tensions by the Trump administration so
the decision is now expected to have a bigger impact on the overall global
economy which obviously puts the Fed in a more difficult position all right
angel Munna senior correspondent at Thomson Reuters in New York many thanks
to you for your insights today we appreciate it thank you for having me