Translation: ChainCatcher
On November 8, the Federal Reserve announced a 25 basis point rate cut to 4.5%-4.75%, in line with market expectations. The decision was unanimous, the policy statement's wording remained largely unchanged, continuing to emphasize the close monitoring of risks to the dual mandate, but removed the phrase 'more confident that inflation is sustainably moving toward the target.' No explicit signal was given regarding future rate cuts, nor did it comment in any way on the outcome of the U.S. elections.
Full text of the Federal Reserve policy statement
The latest indicators show that economic activity continues to expand robustly. Overall, labor market conditions have eased somewhat this year, with the unemployment rate rising but still remaining low. Inflation is gradually approaching the committee's 2% target but is still slightly above the target level.
The committee's goals are to achieve maximum employment and a long-term inflation rate of 2%. The committee assesses that the risks to achieving employment and inflation targets are broadly balanced. There remains uncertainty in the economic outlook, and the committee is closely monitoring the risks to its dual mandate.
To support its objectives, the committee decided to lower the target range for the federal funds rate by 25 basis points to 4.5% to 4.75%. When considering further adjustments to the target range for the federal funds rate, the committee will carefully assess new data, changes in the economic outlook, and the balance of risks. 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 firmly committed to supporting maximum employment and returning inflation to its 2% target.
In assessing the appropriate stance of monetary policy, the committee will continue to monitor the impact of new information on the economic outlook. If risks emerge that hinder the committee's ability to achieve its goals, the committee will adjust the stance of monetary policy as appropriate. The committee's assessment will consider a wide range of information, including labor market conditions, inflation pressures and expectations, and financial and international dynamics.
The committee members who voted in favor of this monetary policy action include Chairman Jerome Powell, Vice Chairman John Williams, Thomas Barkin, Michael Barr, Raphael Bostic, Michelle Bowman, Lisa Cook, Mary Daly, Beth Hammack, Philip Jefferson, Adrianna Kugler, and Christopher Waller.
