On November 8, the Federal Reserve announced a 25 basis point rate cut to 4.5%-4.75%, in line with market expectations. This decision was unanimous, and the wording of the policy statement remained basically unchanged. It continued to emphasize the close attention to the risks of the dual goals, but deleted the sentence "more confident that inflation is moving towards the goal sustainably". No clear signal was sent about future rate cuts, nor did it comment on the results of the US election in any way.
The latest indicators show that economic activity continues to expand steadily. Since the beginning of this year, labor market conditions have generally eased, and the unemployment rate has risen but remains low. Inflation is gradually approaching the committee's 2% target, but it is still slightly above the target level.
The committee's goal is to achieve maximum employment and a long-term inflation rate of 2%. The committee judges that the risks of achieving employment and inflation targets are roughly balanced. There are still uncertainties in the economic outlook, and the committee is closely monitoring the risks of the dual goals.
To support its goals, the committee decided to lower the target range of the federal funds rate by 25 basis points to 4.5% to 4.75%. The Committee will carefully assess emerging data, changes in the economic outlook, and the balance of risks as it considers further adjustments to the target range for the federal funds rate. The Committee will also continue to reduce the size of its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.