CARY, NC, January 15, 2025-

Macroeconomic Overview: The Federal Reserve decided to decrease interest rates by a quarter of a point after its meeting on December 18^th.  This rate cut was widely anticipated by markets.  Markets may not have been expecting details released in comments following the meeting that indicated only two cuts were now forecast for 2025.  This is less than the four cuts that officials had hinted at previously.

The revised outlook for U.S. interest rates had immediate effects on financial markets.  Foreign exchange was among the markets experiencing volatility.  Higher U.S. interest rates can make U.S. securities more attractive and a greater flow of money into the U.S. lifts the USD.  Equity markets moved lower.  Higher rates can slow growth and potentially affect company earnings.  The Federal Reserve indicated that progress on inflation appears to have stalled and stated that inflationary concerns were their primary reason for the changes to their outlook for interest rates.

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