AUD/USD soars as Fed cuts rates by 50 bps

• AUD/USD soared near 0.6800 after the Fed's larger than expected cut.
• The Fed signalled three additional cuts in 2024.
• Unemployment projections where revised higher

The AUD/USD pair surged towards the 0.6800 level following the Federal Reserve's unexpected decision to cut interest rates by 50 basis points, surpassing the anticipated 25 basis points reduction. This aggressive monetary easing reflects the Fed's strengthened confidence in achieving its 2% inflation target, as the Federal Open Market Committee (FOMC) acknowledges that inflation is making substantial progress while remaining somewhat elevated. 

Looking ahead, the Fed has indicated the possibility of two to three additional 25 basis point rate cuts in the upcoming meetings of 2024, underscoring the committee's cautious stance amidst an uncertain economic outlook. The FOMC remains vigilant to risks on both sides of its dual mandate, carefully assessing incoming data and the evolving balance of risks before making further adjustments.

 While unemployment projections have slightly risen, the overall message from the FOMC is one of confidence and careful optimism, as they strive to maintain economic stability and ensure that inflation trends sustainably towards their long-term objective.