
Investing.com -- The Federal Reserve started the rate cutting cycle with a jumbo-sized rate cut on Wednesday, but economist believe a 50 basis point rate cut isn't the new 25bps, expecting a more measure pace of cuts ahead.
"The Fed did cut its policy rate by a bigger 50bp today, to between 4.75% and 5,00%, but the vote was not unanimous and the new rate projections point to smaller 25bp cuts at the remaining two FOMC meetings this year," Capital Economics in a Wednesday note.
There was dissent from one Federal Open Market Committee member, Governor Michelle Bowman, who preferred to cut by 25 bps.
The big and bold rate cut to get the rate-cutting cycle underway, prompting many to speculate whether the pace of 50 basis points rate cut would be maintained for future meetings.
Fed Chairman Jerome Powell, however, cooled hopes for a string of 50bps basis point rate cuts, saying the central bank would react to the incoming data by speeding up, slowing or pausing the pace of rate cuts if appropriate.
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