The US Federal Reserve on Wednesday lowered interest rates by 25 basis points (bps) for the second meeting in a row, bringing the target range to 3.75%–4%, in line with market expectations.
In a statement, the Federal Open Market Committee (FOMC) stated that the economic activity is expanding at a moderate pace, and job growth has slowed this year. In addition, unemployment has edged up slightly but remains within a low range, and inflation has increased since the start of the year but remains somewhat elevated.
The Fed also aims to achieve maximum employment, targeting 2% inflation over the long term. However, economic uncertainty remains elevated, and downside risks to employment have increased in recent months, the FOMC said.
It added that future rate decisions will be based on incoming data and economic outlook, noting that the Fed’s balance sheet reduction program will end in December.
The US central bank will adjust its policy, if necessary, the FOMC said, adding that two committee members voted against the rate cut. Stephen Miran called for a 50-basis-point cut, while Jeffrey Schmid preferred no change at this meeting.
The US Federal Reserve on Wednesday lowered interest rates by 25 basis points (bps) for the second meeting in a row, bringing the target range to 3.75%–4%, in line with market expectations.
In a statement, the Federal Open Market Committee (FOMC) stated that the economic activity is expanding at a moderate pace, and job growth has slowed this year. In addition, unemployment has edged up slightly but remains within a low range, and inflation has increased since the start of the year but remains somewhat elevated.
The Fed also aims to achieve maximum employment, targeting 2% inflation over the long term. However, economic uncertainty remains elevated, and downside risks to employment have increased in recent months, the FOMC said.
It added that future rate decisions will be based on incoming data and economic outlook, noting that the Fed’s balance sheet reduction program will end in December.
The US central bank will adjust its policy, if necessary, the FOMC said, adding that two committee members voted against the rate cut. Stephen Miran called for a 50-basis-point cut, while Jeffrey Schmid preferred no change at this meeting.
