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: 2024.09.20
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US Treasury Sec. Yellen: The Fed rate cut is very positive sign for the economy
World FX news
Breaking news
US Treasury Sec. Yellen: The Fed rate cut is very positive sign for the economy
New
2024.09.20 08:13
2024.09.20 08:13
2024.09.20 08:13
US Treasury Secretary Janet Yellen said on Friday that the US Federal Reserve (Fed) rate cut is very positive sign for the US economy.
Key quotes
It reflects confidence on the part of the Fed that inflation has come way down and is on the path back to the two percent target, and that the risks with respect to inflation have really meaningfully diminished.
At the same time, we have a job market that remains strong.
Market reaction
The US Dollar Index showed no reaction to these comments and was last seen gaining 0.03% on the day at 100.67.
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country's currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Last updated
: 2024.09.20
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PBOC sets USD/CNY reference rate at 7.0644 vs. 7.0983 previous
On Friday, the People's Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.0644, as compared to the previous day's fix of 7.0983 and 7.0637 Reuters estimates.
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2024.09.20 08:32EUR/USD grapples with higher ground as Fed cuts weigh on Greenback
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2024.09.20 08:32US Treasury Sec. Yellen: The Fed rate cut is very positive sign for the economy
US Treasury Secretary Janet Yellen said on Friday that the US Federal Reserve (Fed) rate cut is very positive sign for the US economy.
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2024.09.20 08:12GBP/USD tests 1.33 as Greenback weakness prevails
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2024.09.20 08:03USD/CAD softens near 1.3550 on bearish US Dollar, investors await BoC's Macklem speech
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2024.09.20 08:01Bank of Japan set to keep rates on hold after July's hike shocked markets
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2024.09.20 08:00Disclaimer:
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