Fed’s soft landing may ignite manufacturing technology market growth

In a widely anticipated move, the Federal Reserve slashed the federal funds rate by another 25 basis points to a target range of 4.5% to 4.75%. In announcing the decision, the FOMC statement stated “that the risks to achieving its employment and inflation goals are roughly in balance.” However, Fed Chair Jerome Powell cautioned that there may be bumps along the road.

“The strength in the industrial sectors we saw in the GDP report last week was echoed by Chair Powell in the press conference,” says Christopher Chidzik, principal economist of AMT – The Association For Manufacturing Technology. “When we look at orders for manufacturing technology, they seem to have hit bottom in July 2024 and have been trending upward ever since. This is a leading indicator that the growth seen in the economy is on a sustainable path if the Fed can maintain the balance of risks with the rate cut announced.

“The recently released economic data and the path of the Fed indicates that the economy has found itself at the onset of an economic soft landing. During the last soft landing, which began in April 1995, orders of manufacturing technology initially fell along with interest rates, only to rebound to record levels by the beginning of 1998. Should our current episode prove to be the same, the manufacturing technology industry may find itself at the beginning of another strong market.”