The Federal Reserve’s larger-than-expected rate cut suggests that it saw an uncertain trajectory for the US economy with downside risks.
Fed policy is in trial and error mode until it lands on a new equilibrium. There will be more turbulence and uncertainty for Asia and the rest of the world.
For Asia, the immediate impacts will be felt in the currency and other financial markets. Real-economy impacts will be modest for now as monetary policy takes time to work.
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