The Fed cut interest rates by half a percentage point yesterday—the first cut in four years and double the 25 basis points that many expected from the central bank. And yet the markets dipped down, perhaps because of a perceived disconnect between Fed Chair Jerome Powell’s sunny prognosis that “the economy is in good shape” and the committee’s bold action that suggests a possible recession on the horizon.

The United States Federal Reserve has cut interest rates by half a percentage point overnight. This has put pressure on the Reserve Bank to bring forward its own rate cuts. Sky News Australia was joined by Barrenjoey Chief Economist Jo Masters to discuss the US Federal Reserve cutting interest rates.