The cut brings the funds rate more in line with the market. The Fed was manipulating rates to be above the market for way too long.
This
However, the market manipulation of the Fed and their reasoning for doing so on a historical basis is difficult to rationalize and cannot be viewed absent politics. They kept us on a sugar high that masked the economic malaise of the last administration. Up to this cut announced today they have seemingly acted to dampen the economic surge under the current administration.
Trump has been correct in his assessment and his criticisms, but I am not sure why they acted so dramatically today.
Trump has been correct in his assessment and his criticisms, but I am not sure why they acted so dramatically today.
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It brings the funds rate more in line with the yield curve.
https://stockcharts.com/freecharts/yieldcurve.php
Exactly, it almost seems like they deliberately tanked the markets by announcing a rate cut in the middle of the day. They could have done this after hours. It was very unusual.