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The Federal Reserve cut rates

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The Maltese market closed in the green on Wednesday, with the MSE Equity Total Return Index ending the session 0.236% higher, to 9,853.225 points. Best performer was MIDI plc by adding 3.85% to close at 0.675, followed by RS2 Software plc and Malta International Airport plc which jumped 3.28% and 1.97% to close at 1.89 and 7.75. Biggest fall was seen from Simonds Farsons Cisk plc, it slid 1.96% to close at 10.00, followed by Bank of Valletta plc with the 1.79% loss to close at 1.10. Go plc was active but closed unchanged.

European stocks staged a small bounce despite mixed reports out of the US-China trade talks in Shanghai and ahead of a key US central bank policy announcement later in the day. The benchmark Stoxx 600 was up by 0.17% to 385.77, while the German Dax had added 0.34% to 12,189.04 and the FTSE Mibtel was ahead by another 0.56% to 21,398.19.

Wall Street stocks had slipped into the red by the close on Wednesday, as the Federal Reserve cut its target interest rates for the first time in more than a decade. The Dow Jones Industrial Average ended the session down 1.23% at 26,864.27, the S&P 500 was off 1.09% at 2,980.38, and the Nasdaq 100 slid 1.3% to 7,848.78.

The Fed cut rates for the first time since 2008.

The Federal Reserve on Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn.

Policymakers led by Fed Chairman Jerome Powell voted 8-2 in favor of a small cut in the federal funds rate, and recommitted to their promise to "act as appropriate" to sustain the country’s longest economic expansion in history.

Interest rates, which affect the cost of borrowing for credit cards and mortgages, are now set to hover between 2% and 2.25%.

The rate cut follows months of pressure from President Donald Trump, who has broken with his predecessors’ practice of walling off the central bank from politics.

The central bank is hoping a rate cut will be the necessary injection to keep the US economy healthy, especially because it has limited ammunition to respond to a downturn with historically low interest rates.

The Fed also announced plans to end the reduction of its $3.8 trillion asset portfolio, effective August 1, two months earlier than previously expected. The runoff was set to end after September.

This article was issued by Nadiia Grech, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.