The Federal Open Market Committee (FOMC) voted 11-to-1 to lower the federal funds rate to a range of 4.75% to 5%, after holding it for more than a year at its highest level in two decades.
While the US Federal Reserve’s decision to cut rates by 50 basis points (bps) came as a surprise that “could be positive for markets in the near term”, BlackRock’s investment experts think it raises the prospects of further volatility ahead.
This will be especially pronounced if growth and inflation “don’t pan out in line” with the soft landing in the Fed’s updated projections, says Jean Boivin, head of the BlackRock Investment Institute.
