What the Fed Interest Rate Cut May Mean for Manufacturers

One economist is predicting additional consumer purchasing and business investment.

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Federal Reserve Chair Jerome Powell announced the target rate would be cut 50 basis points, bringing the federal funds rate to a 4.75% to 5% target range. The move comes less than a week after the close of IMTS 2024, the largest manufacturing trade show in the Western Hemisphere.

Christopher Chidzik, the principal economist for The Association for Manufacturing Technology predicted that the decrease would help spur additional consumer purchasing and business investment.

Chidzik added the following statement:

Fulfilling this additional demand will require the parts and products that are made with the metalworking machinery AMT members provide.


A gradual normalization of interest rates would have been a welcome signal the Fed has squeezed inflationary pressures from the economy without tipping it into recession. With this larger cut, Chair Powell has also recognized some growing risks of rising unemployment.


While that may cause some to entrench their hesitation into future planning, the forward guidance shows unemployment deviating little from the longer-term trend.


If consumers and businesses take those signals from the Fed and translate them into additional spending and investment in the remainder of 2024, demand for manufacturing technology will surely begin to increase for the rest of the year and remain elevated through 2025.

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