Perspectives : Markets & Economy | September 19, 2024

A new day for Federal Reserve policy

The Federal Reserve’s target for short-term interest rates essentially sets the minimum level of borrowing costs in the United States. On September 18, the Fed reduced its interest rate target for the first time in more than four years. The 0.5 percentage point reduction made the Fed’s new target a range of 4.75%–5.00%.
Vanguard’s global chief economist, Joe Davis, and head of fixed income credit, Chris Alwine, explain the meaning of the central bank’s policy shift.

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