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📊 Wall Street Eyes Fed Rate Cuts Amid Inflation Data

🔹 What’s Happening

• Core inflation (excluding food & energy) slowed to 2.9%, the lowest since 2021.
• Q2 GDP growth was reported at 3.3%, beating expectations.
• These signals sparked market optimism that the U.S. Federal Reserve may cut interest rates sooner than expected.

🔹 Why It Matters

• Stocks rally: S&P 500 and Nasdaq rose as investors bet on cheaper borrowing costs.
• Dollar under pressure: Rate cut speculation is weakening the U.S. dollar, boosting gold and oil.
• Global effect: Emerging markets (like India & Brazil) could see stronger capital inflows if Fed eases policy.

🔹 Risks & Cautions

• Fed officials remain divided—some fear cutting rates too early may reignite inflation.
• Supply chain disruptions (due to Red Sea tensions & U.S.-China trade issues) may add price pressures.
• UK banks are facing tax policy uncertainty, which could spill over into global markets.

🔹 Big Picture

If the Fed confirms a rate cut path by late 2025,
👉 Borrowing will get cheaper, housing & tech may boom,
👉 But inflation could bounce back, testing Fed’s credibility.

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📌 Written by WebDynasty
🔗 Reference: Reuters, Bloomberg, U.S. Federal Reserve