On September 19, the Federal Reserve started a cycle of interest rate cuts, lowering the federal funds rate by 50 basis points to 4.75%-5.00%, the first rate cut since March 2020.
Full text of interest rate decision
Recent indicators suggest that economic activity continues to expand at a solid pace. Although job growth has slowed and the unemployment rate has increased slightly, it remains low. Inflation has moved further toward the Committee's 2 percent objective but remains slightly above target.
The Committee's objectives are to achieve maximum employment and 2 percent inflation over the longer run. The Committee is confident that inflation will continue to move toward its 2 percent objective and views the risks to achieving its employment and inflation objectives as roughly balanced. Given the uncertainty surrounding the economic outlook, the Committee is highly concerned about the risks to both sides of its dual mandate.
In light of the progress of inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 50 basis points to 4.75% to 5%. In considering further adjustments to the target range for the interest rate, the Committee will carefully assess recent data, changes in the economic outlook, and the balance of risks. The Committee will continue to reduce its holdings of Treasury bonds, agency debt, and agency mortgage-backed securities. The Committee is firmly committed to supporting maximum employment and returning inflation to its 2% objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee is prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the Committee's achievement of its goals. The Committee's assessments will take into account a variety of information, including labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
The committee members who supported the monetary policy action included: Chairman Jerome Powell, Vice Chairman John C. Williams, Thomas I. Barkin, Michael S. Barr, Raphael W. Bostic, Lisa D. Cook, Mary C. Daly, Beth M. Hammack, Philip N. Jefferson, Adrienne D. Kugler and Christopher J. Waller. The committee member who opposed the decision was Michelle W. Bowman, who preferred to lower the federal funds rate target range by 25 basis points at this meeting.
The article is forwarded from: Jinshi Data
