**Powell’s Remarks on “Risk Management Cut” Cool Market… Fed Dissent Highlighted**
On the 17th (local time), despite the U.S. Federal Reserve’s decision to cut its key interest rate for the first time in nine months, the New York stock market closed with mixed results.
On this day, the Dow Jones Industrial Average rose by 0.57% to close at 46,018.32. However, the S&P 500 index fell by 0.10% to 6,600.35, and the Nasdaq index declined by 0.33% to 22,261.33.
At the Federal Open Market Committee (FOMC) regular meeting, the Fed announced it would lower the benchmark interest rate by 0.25 percentage points, from the previous range of 4.25% to 4.50% to a new range of 4.0% to 4.25%.
This marks the first cut in nine months after holding rates steady at the same level five times since December of last year, and it’s the first cut since the start of the Trump administration’s second term.
However, despite the rate cut, Federal Reserve Chairman Jerome Powell described it as a “risk management cut” during a press conference, signaling a cautious stance that rapidly cooled the stock market.
Powell’s remarks were interpreted to mean that this rate cut is not a full shift towards an easy monetary policy, and that the possibility of two additional rate cuts within the year could not be ruled out.
Dan Siluk, a portfolio manager at Janus Henderson Investors, commented, “Powell seemed to scale back expectations for two additional rate cuts this year,” and described the message as still subtle and far from a complete directional change.
Significant disagreement among Fed members also increased uncertainty regarding future rate prospects. Among 19 Fed officials, nine favored a “0.5 percentage point cut within the year,” which was the majority opinion, but six argued for maintaining the current level, and two suggested a one-time 0.25 percentage point cut.
Some even proposed raising the rate, while others advocated for a “big cut” of 1.25 percentage points below the current figures, showcasing the diverse perspectives within the Fed.