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US Economy: What Will Happen If the Federal Reserve Doesn’t Cut Rates Soon?

The US economy is anticipating that the Federal Reserve will unveil its current interest rate cuts soon. The rate revelation will significantly impact the price of USD, gold, and other precious metals. Similarly, the rate-cut ratio will also determine the inflationary pressure that the US economy is bound to experience sooner or later. 

However, with Federal Reserve Chair Jerome Powell delaying the announcement, the anticipation and potential buildup have already started to show their colors. With investors pivoting towards gold to secure their returns, the value of the USD has plummeted, which could tank further if the curbs to restrict economic decline are not put in place. 

Also Read: Why Is The US Economy Heading Toward a Death Spiral?

What Will Happen If the Federal Reserve Cuts Rates? 

The FED now requires approval before state banks can issue, hold or transact crypto stablecoin payments, according to a press release today.
Source: Bankrate

With news of the Federal Reserve cutting rates in 2024 catching pace, the anticipation surrounding the buildup is compelling investors to pivot toward secure assets. This is happening primarily due to the fear that interest rate cut ratios often come associated with. 

The decision of the FOMC to cut rates is bound to impact all leading verticals of the US economy. The interest rate cut will make it easier for the banks to commence borrowing activities at an alarming rate. Similarly, the development can also stir inflation, causing yield markets and the housing sector to undergo a death spiral. 

The sector could pivot towards gold as a robust store of value, impacting returns on savings.

Also Read: Live Bitcoin Halving Countdown

What Happens If the Federal Reserve Doesn’t Cut Rates Soon?

If the Federal Reserve decides not to cut rates, this could also spur a whole new level of economic downturn. The Fed’s decision not to cut interest rates could slow down the bank’s and businesses’ lending and borrowing, making it harder for the entities to stimulate economic activity. At the same time, this particular decision can also boost the value of the USD against other currencies. It can also stir the bond yields to gain strength amid the chaos. 

Per a recent prediction made by the Bank of America, the US government will have to pay $1.6 trillion in annual interest if the FED does not cut interest rates soon. 

Similarly, if the agency announces a rate cut, it will propel the US sectoral economic units to undergo a significant drop-down. 

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