Oil moves up as US Fed cuts key interest rate

Brent’s price increased after the US Federal Reserve (Fed) cut its key interest rate for the second time in 2024.

PHOTO: The US Federal Reserve headquarters in Washington DC. Getty Images

In a largely anticipated move, the US Federal Open Market Committee (FOMC) cut its key interest rate by 25 basis points, bringing the central bank’s benchmark rate to a range between 4.50 - 4.75%.

Earlier in September, the Fed cut interest rates by half a percentage point for the first time since 2020.

This is the second reduction in interest rate in 2024. The cut was supported by the US central bank’s inflation reading, which is gradually approaching its 2% target, it said.

“The Fed’s message was clear—disinflation is taking root, and the era of sky-high rates is fading,” SPI Asset Management’s managing partner Stephen Innes said.

Lower interest rates in the US can boost demand growth for dollar-denominated commodities like oil as it makes the greenback weaker against other currencies.

By Aparupa Mazumder

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