Page 12 - Policy Economic Report - September 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

3. U.S. Fed slashes lending rate by 50 bps in first cut since 2020

The U.S. Federal Reserve cut its key lending rate by half a percentage-point in its first reduction for more
than four years, sharply lowering borrowing costs. The decision lowers the federal funds rate to a range
between 4.75%-5%.

Figure 5: Headline Inflation rate

Source- Federal Reserve Bank of New York

The Fed’s decision to ease monetary policy is likely to support growth and stabilize a slowing labor
market. Recent indicators suggest that economic activity has continued to expand at a solid pace.

The Fed Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over
the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward
2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.

The Fed's decision will affect the rates at which commercial banks lend to consumers and businesses,
bringing down the cost of borrowing. The Fed’s policymakers also signaled that they expect to cut their
key rate by an additional half-point in their final two meetings this year, in November and December and
they envision four more rate cuts in 2025 and two in 2026 as well.

4. UN Adopts Pact for Sustainable Global Trade System

At the 79th UN General Assembly, world leaders adopted the Pact for the Future, a landmark commitment
to tackle global challenges through multilateralism. Action 5 of the pact focuses on making the global
trading system a driver of sustainable development, emphasizing export-led growth and preferential trade
access for developing countries—crucial for achieving the Sustainable Development Goals.

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