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I'm Conway Gittens reporting from the New York Stock Exchange. Here's what we're watching today on TheStreet.
stocks closed lower Wednesday in a volatile session after the Federal Reserve delivered its first interest rate cut since pandemic policymakers lowered the so-called federal funds rate by 50 basis points to the 4.75 percent to 5 percent range. This is the lending rate that determines how much borrowers must pay on business loans, mortgages, auto loans and credit cards.
At a news conference, Federal Reserve Chairman Jerome Powell said inflation had “declined substantially” while risks to the labor market had increased enough to justify the rate cut.
In other news, Boeing has made the decision to temporarily furlough a large number of executives, managers and other US staff. The move comes just days after more than 30,000 Boeing machinists went on strike over a new labor contract. The company said the temporary suspensions would affect tens of thousands of employees. Boeing had already announced it would institute a hiring freeze due to the strike.
Commenting on the layoffs, Boeing CEO Kelly Ortberg said: “While this is a difficult decision that affects everyone, it is an effort to preserve our long-term future and help us navigate this difficult time. We will continue to communicate transparently as the dynamic situation evolves and do everything we can to limit this hardship.”
Ortberg revealed that affected employees will be suspended for one week, every four weeks, until the labor dispute is resolved. He also said that his executive team will implement “proportionate” salary cuts.
The strike has already put Boeing's credit rating at risk, which would mean higher borrowing costs at a time when revenues would not be flowing in. Boeing already burned through $8 billion in the first half of the year and the strike will make its financial situation more precarious.
That's it for the daily roundup. From the New York Stock Exchange, I'm TheStreet's Conway Gittens.