US Fed Reserve Cuts Key Rates by 50 Basis Points
The US Federal Reserve slashed fed fund rates by 50 basis points (bps) as hawkish monetary policy has now expired. In a statement, the Fed said recent indicators suggest that economic activity has continued to expand at a solid pace.
The Fed said job gains have slowed, and the unemployment rate has moved up but remains low, according to an official statement released by the authority. It also noted that US inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated.
The Fed said its committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Fed said it has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate. “In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent.
“In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
“The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective”.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook, according to the official statement released today.
US Federal Reserve said it would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. #US Fed Reserve Cuts Key Rates by 50bps Oil Prices Jump over Disruption in US Supply, Fed Rate Cut
