#FedRateCutAffectsDollarTrend A Federal Reserve (Fed) rate cut happens when the Fed lowers its benchmark interest rate, usually to stimulate economic growth. Here are the main reasons the Fed cuts rates: 1. Slowing Economic Growth • If GDP growth weakens, the Fed may cut rates to boost borrowing and spending. 2. Low Inflation • If CPI (Consumer Price Index) inflation falls too low, the Fed cuts rates to encourage spending and prevent deflation. 3. High Unemployment • If job growth slows and unemployment rises, lower rates can make borrowing cheaper, helping businesses expand and hire. 4. Financial Market Instability • In times of market crashes or banking crises, the Fed may cut rates to restore confidence and liquidity. 5. Global Economic Concerns • If global events (e.g., trade wars, recessions) hurt the U.S. economy, the Fed may cut rates to protect growth.