Even before the announcement, the question was whether it would be 0.25 or 0.5 percentage points. When it became clear that the latter applied, the American stock market reacted quickly.
Just after eight o’clock on Wednesday evening, the S&P 500 was up 0.7 percent after being at an unchanged level shortly before, writes DI.
The DOW index also went up 0.7 percent, writes CNN.
This is how Sweden is affected
The American decision to lower the key interest rate may cause ripples in Sweden.
It may now be easier for the Riksbank to continue with its lowering path without having to look at the US, says SVT’s economic commentator Alexander Norén.
– This gives reason to continue, if you judge that the Swedish economy needs it, without caring that the Americans have fallen behind, he says in SVT’s Aktuell.
More reductions to be expected
The US central bank (Fed) expects interest rates to be cut by another 0.50 percentage points this year. The forecast also includes four interest rate cuts next year and two more in 2026.
The next meeting of the central bank is on November 6 and 7, right after the US election.
Robert Bergqvist, senior economist at SEB, signs X that this is “the beginning of a monetary string of cuts”
The interest rate in the US is now at 4.75–5.0 percent.