Market history · Central banks ·
The Fed begins cutting with a half-point move
On 18 September 2024 the Federal Reserve lowered its policy rate by 0.5 percentage points, to a range of 4.75–5.00%, after holding at a 23-year high for over a year. It cited progress on inflation and a softer labour market.
The larger-than-usual first step signalled a shift in focus from inflation to protecting employment. Longer-term yields did not fall as much as many expected, a reminder that policy rates and market yields are not the same thing.
The takeaway
The path of rates, not the first move, drives the outcome for bonds and cash returns.
This is a retrospective about a past event, provided for general information. It is not investment advice, does not describe RockLake's positioning at the time, and past performance is not a guide to future performance. Read the risk warning.