The Federal Reserve cut its benchmark interest rate by half a percentage point, signaling more reductions to come, in its first easing cycle since the start of the pandemic. The decision was made to preempt any weakening of the US economy and labor market. Fed Chair Jay Powell stated that the US economy is in a good place and the rate cut is designed to maintain its strength. The move was well received by markets, with US stocks rallying and Asian markets also seeing gains. Most officials expect further rate cuts in the future, with concerns about the labor market and slowing economic growth. Overall, the decision marks a significant moment for the central bank and the upcoming presidential election. The median estimate for “core” inflation, excluding food and energy prices, was revised down to 2.6% for this year, dropping to 2.2% and 2% in the following two years. The forecast suggests a gradual decline in inflation rates over the next few years.
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Why Shares of Tesla Are Soaring Today
Shares of Tesla (NASDAQ: TSLA) rose nearly 4% after CEO Elon Musk updated the status of the company's robotaxi fleet, amid indications that electric vehicle sales may be improving. Notably, wait times for the Model Y have increased from one to three weeks to four to six weeks, suggesting a rise in orders despite recent declines in sales over the first two quarters of the year. Want More Context? 🔎
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