US interest rate cut
The Federal Reserve cut the US interest rate to 3% yesterday.
The move comes just one week after the Fed made an unscheduled rate cut of 0.75%, the largest reduction in 26 years. This means that Americans have seen the cost of borrowing money slashed by more than a third since last week.
Catherine MacLeod, economist at BDO Stoy Hayward Investment Management, claimed the Fed’s move would result in a weaker dollar and higher inflationary pressures. It is however, likely to be supported by Americans, according to MacLeod.
“As US inflation becomes steadily higher, we expect the long-term slide in the dollar to continue and below average rates in the US for some time to come,” she explained.