The Federal Reserve has cut its key interest rate for the second time this year, signaling a shift towards supporting the job market and fighting inflation. However, with uncertainties following the presidential election and potential policy changes under the Trump administration, future rate cuts may be unlikely. These future moves could potentially affect mortgage rates, which have already fluctuated in anticipation of changes in the economy and consumer spending.
The Federal Reserve, Interest Rates, and Donald Trump
The Federal Reserve (Fed) is the central bank of the United States. It is responsible for setting interest rates, which are the prices at which banks borrow and lend money to each other. Interest rates have a significant impact on the economy, as they affect the cost of borrowing for businesses and consumers.
In July 2019, the Fed cut its key interest rate for the second time this year. This move was seen as a signal that the Fed is shifting towards supporting the job market and fighting inflation. However, with uncertainties following the presidential election and potential policy changes under the Trump administration, future rate cuts may be unlikely.
Background
The Fed has been raising interest rates since December 2015. This was done in an effort to combat inflation, which is the rate at which prices rise. However, inflation has remained low, and the economy has continued to grow.
In recent months, the Fed has become increasingly concerned about the impact of the trade war between the United States and China. The trade war has led to a decline in business investment and consumer spending. The Fed has also expressed concern about the potential impact of a no-deal Brexit.
Impact of Interest Rate Cuts
Interest rate cuts can have a positive impact on the economy by making it cheaper for businesses to borrow money and invest. This can lead to increased economic growth and job creation. However, interest rate cuts can also lead to inflation if they are not used carefully.
Uncertainties Following the Presidential Election
The results of the presidential election have created uncertainty about the future of interest rate policy. Donald Trump has pledged to cut taxes and regulations, which could lead to higher economic growth. However, he has also threatened to impose tariffs on imports from China, which could lead to higher inflation.
Potential Policy Changes under the Trump Administration
The Trump administration has proposed a number of changes to the way the Fed operates. These changes include reducing the Fed's independence and giving the president more control over the setting of interest rates.
FAQs
The Federal Reserve is the central bank of the United States. It is responsible for setting interest rates, which are the prices at which banks borrow and lend money to each other.
Interest rate cuts can have a positive impact on the economy by making it cheaper for businesses to borrow money and invest. This can lead to increased economic growth and job creation. However, interest rate cuts can also lead to inflation if they are not used carefully.
The results of the presidential election have created uncertainty about the future of interest rate policy. Donald Trump has pledged to cut taxes and regulations, which could lead to higher economic growth. However, he has also threatened to impose tariffs on imports from China, which could lead to higher inflation.
The Trump administration has proposed a number of changes to the way the Fed operates. These changes include reducing the Fed's independence and giving the president more control over the setting of interest rates.
The future of interest rate policy is uncertain. The Fed will likely continue to monitor the economy and make decisions on interest rates based on its assessment of the economic outlook.
The Indian government has stepped in to support its exporters amidst high tariffs imposed by the US. This includes providing assistance and facilitating access to domestic buyers for exporters. However, India may face challenges in the coming months with additional tariffs on Russian oil, impacting its export growth to the US.
After nearly four days of striking and thousands of passengers being stranded, the Canadian Union of Public Employees (CUPE) and Air Canada have reached a tentative agreement, bringing a halt to the strike. The airline plans to gradually resume flights starting Tuesday evening, but warns that it could take up to a week before operations return to normal. The deal, still to be ratified by union members, addresses key issues such as pay and hours, and is described as bringing "transformational change" for workers and the industry. Passengers are advised to only head to the airport if they have confirmed bookings.
Indian equity markets saw a positive start on Thursday, September 18, 2025 due to the US Federal Reserve's decision to cut interest rates by 25 basis points. The Sensex and Nifty indices opened with significant gains, with major tech companies like Infosys and HCL tech leading the pack. However, Bajaj Finance and other financial institutions faced some losses in the opening session. With Gift Nifty indicating a positive start and strong investments by Foreign and Domestic Institutional Investors, experts predict better market conditions in the coming days.
After nearly four days of cancelled flights and stranded passengers, Air Canada has reached a tentative agreement with the union representing its cabin crew. The company plans to resume operations gradually on Tuesday evening, but it could take a week for full service to resume. The deal, which still needs to be ratified by union members, includes "transformational change" for workers and the industry. Passengers are advised to only head to the airport if they have confirmed bookings.
The US Federal Reserve announced a 25 basis point cut in interest rates, which was widely expected by economists and investors. The decision was approved by a stronger than expected 11-1 vote, signaling unity within the central bank. The US markets reacted positively to the news, with the Dow Jones and Nasdaq trading higher. The impact of this rate cut on Indian markets is yet to be seen, but Nifty futures suggest a gap-up opening.
As VMS TMT Ltd. prepares to launch its initial public offering, the grey market premium for its mainboard issue is already showing signs of high demand. The company, which manufactures TMT Bars and deals in scrap and binding wires, is set to go public on Wednesday, September 17. With the GMP currently at Rs 23 per share, investors are estimating a potential listing gain of 23.23% per share. The company is offering 1.5 crore shares at a price band of Rs 94 to Rs 99 per share, with a minimum investment of Rs 14,850 for retail investors.
Despite President Trump's dismissal of a top Federal Reserve official, investors shrugged off concerns and pushed stocks higher. The Dow, S&P 500, and Nasdaq all finished the day in positive territory, with the Dow hitting a new record closing high. While the move to remove the official raises questions about the Fed's independence, investors are focused on upcoming economic indicators, including a report on inflation and highly anticipated earnings reports from tech giants like Nvidia. Meanwhile, the digital currency Bitcoin continues to struggle, dropping below $110,000 for the first time in two weeks.
In an effort to reduce reliance on China for key minerals used in advanced technologies, India is exploring partnership with a rebel group in Myanmar to secure rare earth samples. The Ministry of Mines has directed state-owned and private companies to collect samples from Kachin Independence Army-controlled mines and test them in domestic labs. This move comes in light of China's recent export restrictions on rare earth magnets, causing disruptions in global supply chains.
Oracle chairman Larry Ellison, who hails from the Bronx, has surpassed Tesla CEO Elon Musk as the richest person in the world with a net worth of $405 billion. This jump in wealth was reported by Barron's on Wednesday, putting Ellison ahead of Musk's net worth of $390 billion. This milestone marks a shift in the top spot amongst the world's wealthiest individuals.
The US Producer Price Index fell 0.1% in August, bucking expectations of a rise and indicating a potential slowdown in overall economic growth. The decline was driven by a slump in the cost of services, particularly within wholesalers and retailers. The news has led to a drop in Treasury yields and solidifies expectations of an interest rate cut by the Federal Reserve next week.