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  • Hi, and welcome to The Bottom Line!

  • In this video, we're going to take a look at why the Federal Reserve cut interest rates

  • even though the U.S. economy is performing well.

  • The Federal Reserve recently announced that it's cutting interest rates, the first time

  • it's done so since 2008.

  • Rate cuts generally coincide with some sort of economic weakness, which makes the Fed's

  • recent decision a bit uncommon.

  • The last time the Fed began a rate cut cycle was during the Great Recession.

  • At the time, unemployment had started to tick upwards and there were some major signs that

  • the economy was beginning to fall apart.

  • For example, housing prices had fallen significantly by the time the Fed made its first move.

  • But the Fed's recent rate cut comes at a time when the U.S. GDP growth is strong and the

  • stock market is at all-time highs.

  • Additionally, the unemployment rate in the U.S. is sitting at just 3.7% right now,

  • which is extremely low in historical context.

  • So, why did the Federal Reserve cut interest rates this time?

  • To understand why a rate cut makes sense this time around, it's important to realize that

  • the Fed has a dual mandate.

  • The first is to maximize employment and the second is to maintain inflation at a desirable level.

  • With the unemployment rate at about 3.7% right now, employment is maximized already.

  • However, inflation has been extremely low, well below the Fed's 2% target rate,

  • which means that there's a solid case to be made that it's in the economy's best interest to

  • help sustain the current expansion by cutting rates.

  • Additionally, global economic growth has started to slow, and the ongoing trade war between

  • the U.S. and China is prompting an elevated level of caution among policymakers.

  • Some experts think that the Fed might make several rate cuts in order for it to reach

  • its inflation goal.

  • The bottom line is that the U.S. economy is solid, but the global economy isn't quite

  • as strong as the Fed would like to see.

  • Cutting interest rates should help inflation start to take upward and allow the U.S. economy

  • to continue growing. Thanks for watching this video!

  • Do you think the Federal Reserve made the right move by cutting interest rates?

  • Let us know in the comments section below.

  • If you liked the video, give us a thumbs up and subscribe.

  • It helps us to reach more people, which lets us make more awesome content.

Hi, and welcome to The Bottom Line!

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B1 中級 美國腔

為什麼美聯儲剛剛降息? (Why the Federal Reserve Just CUT Interest Rates)

  • 169 6
    王語萱 發佈於 2021 年 01 月 14 日
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