Change in Fed forecast led to a collapse in stock prices on Wall Street

US Federal Reserve Chairman Jerome Powell announced a rate cut of 0.25% to 4.5%, in line with analysts’ forecasts.

At the same time, the Fed published a new forecast in which it reduced the number of additional interest rate cuts expected in 2025 from four to two, while raising its inflation forecast from 2.1% to 2.5% by the end of the year.

This forecast came as a surprise to the markets and led to a sharp drop in quotes. The S&P 500 lost 3%, the NASDAQ lost 3.6%, and the Dow Jones lost 2.6% (the first time since 1974 that the index finished 10 consecutive days in the red).