Market hopes dashed as Fed signals rate caution

Market hopes for a more dovish US Federal Reserve were somewhat dashed on Thursday after the world’s most important central bank downplayed the need to aggressively slash interest rates to prevent an economic slowdown.

While the US central bank lowered the policy rate by a quarter of one percentage point to the range of 4 per cent to 4.25 per cent as widely expected on Thursday (AEST), its dot plot projections showed “just” two more quarter-point reductions this year and one more in 2026.

Source: https://www.afr.com/markets/debt-markets/market-hopes-dashed-as-fed-signals-rate-caution-20250917-p5mvvo