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The Fed concluded its Open Market Committee meeting and, as expected, cut the federal funds rate by another 25 basis points. The target federal funds rate is now 4.25%-4.50%. This was the third cut in the interest rate cutting cycle, which began in September after the central bank raised interest rates aggressively during 2022 and 2023. Three meetings, three cuts. But based on forecasts released alongside the interest rate decision, it appears that the Fed will refrain from cutting interest rates in the coming months at an aggressive rate. Although the Fed has clearly shifted its focus from fighting inflation alone, it is not yet able to fully focus on stimulating the economy. CPI inflation fell from readings above 9.0% to readings below 3.0% – but has recently failed to continue the downward trend towards the central bank’s 2% target. On the other hand, the unemployment rate remains historically low, and average GDP growth has been close to 3.0% for several quarters. The economy is not in desperate need of lower interest rates. yet. The market’s reaction to the Fed’s signals suggests that investors and traders are more concerned that the current level of high interest rates will push the economy closer to a recession. In our opinion, this should not happen