The Fed's "Bold Move" with a Sharp Rate Cut Sparks Global Market Waves

**A Sharp Rate Cut, Exceeding Market Expectations**

Recently, the U.S. Federal Reserve made an overnight decision to lower interest rates by 0.5%, a cut that far exceeded market expectations and drew widespread attention. Jameel Ahmad, Chief Analyst at GTC FX, provided an in-depth analysis during an interview on Al Jazeera's program *Counting the Cost*.

Jameel Ahmad pointed out that, although the Fed's rate cut came later compared to the European Central Bank and the Bank of England, it was more substantial. He compared the inflation issue to weight loss, noting that after inflation rates dropped from their peak to 3%, they stagnated for a while. It was only this month that they began moving closer to the 2% target, prompting the Fed to finally take action.

**Low Risk of U.S. Recession**

Regarding the risk of a U.S. economic recession, Jameel Ahmad believes this risk remains low. Last year, the U.S. economy grew at nearly 5%, and this year it is expected to grow between 2% and 3%. Although some recent economic data has shown signs of weakness, U.S. consumers continue to spend actively, providing support for the economy. The Fed's sharp rate cut aims to signal that it can maintain control and support economic growth.

**Future Rate Cut Expectations and Market Impact**

As for whether the Fed will act again before the end of the year, Jameel Ahmad predicts that, given that the financial markets anticipated a 1% rate cut this year and the Fed has already delivered half of that, and with inflation seemingly under control, there may be one more rate cut before the U.S. presidential election. As the world's largest economy, any rate cut in the U.S. will undoubtedly have a profound impact on the global economy.

**Global Economic Outlook Following the Rate Cut**

Jameel Ahmad stated that the Feds rate cut has given some confidence to the global economy, with hopes that it will gradually return to normal. Since the global financial crisis in the mid-2000s, the world has become accustomed to low-interest-rate policies. Now that the Fed has begun cutting rates, it may help fuel global economic momentum. However, he also noted that the new “normal” might be a more moderate or higher interest rate policy, potentially finding balance around 3%.

This significant rate cut by the Federal Reserve is sure to stir a new wave of activity in global markets. Moving forward, all eyes will be on the Feds next actions and the broader changes in the global economy.