Fed announces interest rate decision

The US Federal Reserve, at the end of its two-day meeting, lowered the policy interest rate by 25 basis points, bringing it to the 3.75-4 percent range. The Fed last cut interest rates by 25 basis points at its September meeting, marking its first rate cut since last December.

The Fed's interest rate decision came in an environment where some critical data were not released due to the federal government shutdown. Fed Chair Jerome Powell drew attention to risks in the labor market in a statement this month and said the Federal Open Market Committee (FOMC) was focused on threats to the labor market.

Despite the government shutdown, the most recently released inflation data remained below market expectations, which had strengthened expectations that the Fed might cut interest rates at its October meeting.

On the other hand, US President Donald Trump had frequently called on Fed Chair Jerome Powell to make aggressive interest rate cuts to stimulate the economy.

INTEREST RATE DECISION RECEIVES DISSENTING VOTES FROM BOTH SIDES FOR THE FIRST TIME IN YEARS

For the first time in years, the interest rate decision received dissenting votes from both sides. Board member Stephen Miran said that for the second consecutive meeting, he believed the Fed should lower interest rates more quickly, noting that he would have preferred a 50 basis point cut instead of the quarter-point reduction implemented by the Fed.

Meanwhile, hawkish Kansas City Fed President Jeffrey Schmid voted against the decision to implement the cut, favoring keeping interest rates unchanged.

News Source: 12punto