U.S. stocks experienced their second-largest loss of the year after the Federal Reserve indicated it may implement fewer interest rate cuts in 2025 than expected.
The Federal Reserve's updated projections revealed a reduction in anticipated interest rate cuts for 2025, signaling just two expected cuts instead of four as previously forecast.
After the Fed's announcement, Treasury yields increased, contributing to the downward pressure on the stock market amid concerns about fewer rate cuts, which investors prefer.
Federal Reserve Chair Jerome Powell emphasized that the central bank is entering a new phase, after initiating a series of interest rate cuts aimed at supporting job growth.
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