November 1, 2019

Fed Slashes Interest Rates

The Fed slashes interest rates for 3rd time since financial crisis

The Federal Reserve lowered borrowing costs on Wednesday for the third time since the financial crisis as policymakers sought to insulate the longest expansion on record from growing risks. After a two-day policy meeting, the central bank lowered its key interest rate to a target range between 1.5% and 1.75%. The cut of the fourth percentage point was widely expected by forecasters and investors. But the announcement by the Federal Open Market Committee that it could hold back further adjustments is likely to attract the wrath of a White House that has called for aggressive stimulus measures.
"We believe that policymakers are well positioned to support the outlook," Fed chief Jay Powell said at a press conference on Wednesday afternoon. Several politicians opposed the decision on Wednesday, with Kansas City Fed President Esther George and Boston Fed President Eric Rosengren voting to keep interest rates unchanged. In recent months, the FOMC has been divided on how to approach the pressures that have arisen against the backdrop of a still solid economy. Consumer spending and labour recruitment have remained stronger than expected, although the Trump administration's trade disputes and subdued inflation are weighing on the outlook.

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