The Federal Reserve\u2019s decision yesterday to cut a key interest rate by a quarter of a point may be the final rate decrease for the time being, bringing an end to a series of cuts since September. \u00a0The latest cut brought the federal funds rate to 2 percent. The Fed began lowering rates in September in an effort to aid the sputtering economy. While concerns about slowing economic growth and a possible recession remain, the Fed signaled that fears of inflation and devaluation of the dollar may necessitate a pause in the cutting. \u00a0The quarter-point rate decrease was more modest than the half point cut at the Fed\u2019s previous meeting on March 18, but according to Gary Gabriel, executive director of the capital markets group at real estate services firm Cushman & Wakefield Inc., even the quarter-point cut was seen as too much for some. \u00a0\u201cThe cut was expected but perhaps not welcome by some,\u201d noted Gabriel (pictured). \u201cThose with an eye toward inflationary pressures are less than enthusiastic.\u201d Among those with such concerns were two members of the Fed\u2019s Open Market Committee who voted against the rate cut. Those members\u2014Richard Fisher of Dallas and Charles Plosser of Philadelphia\u2014also voted against the March\u2019s rate cut. Gabriel said the Fed\u2019s indication of a pause in the cuts was the result of both inflation concerns and the fact that using rate cuts to spur a sluggish economy is only effective to a point. \u201cAt some point, you can cut no lower, and \u2026 in past times of market stress using the rate lever didn\u2019t have positive long term results.\u201d \u00a0While the direct economic effect of the cuts on the economy is uncertain, Gabriel said the psychological boost given to the market is often just as important. The stock market surged in the wake of yesterday\u2019s announcement, but retreated by the end of the day and ended with a loss, likely due to concerns about inflation. The Fed\u2019s next meeting is scheduled for June 24.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Federal Reserve\u2019s decision yesterday to cut a key interest rate by a quarter of a point may be the final rate decrease for the time being, bringing an end to a series of cuts since September. \u00a0The latest cut brought the federal funds rate to 2 percent. The Fed began lowering rates in September…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003797383","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n