On November 8, the Federal Reserve announced a rate cut of 25 basis points to 4.5% - 4.75%, in line with market expectations. This decision was unanimously passed, the policy statement's wording remained largely unchanged, continuing to emphasize the close monitoring of risks to the dual objectives, but removed the phrase 'more confident that inflation is sustainably moving toward the target', and did not signal any clear indications for future rate cuts, nor did it comment in any way on the results of the U.S. elections.
Full text of the Federal Reserve policy statement
The latest indicators show that economic activity continues to expand steadily. So far this year, labor market conditions have generally eased, with the unemployment rate rising but remaining low. Inflation is gradually approaching the Committee's 2% target but is still slightly above the target level.
The Committee's objective is to achieve maximum employment and a long-term inflation rate of 2%. The Committee judges that the risks to achieving the employment and inflation goals are broadly balanced. There remains uncertainty in the economic outlook, and the Committee is closely monitoring the risks to the dual objectives.
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%. In considering further adjustments to the federal funds rate target range, 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 restoring inflation to its 2% target.
In assessing the appropriate monetary policy stance, the Committee will continue to monitor the impact of new information on the economic outlook. If risks that hinder the Committee's ability to achieve its goals emerge, the Committee will adjust the monetary policy stance as appropriate. The Committee's assessment will take into account a wide range of information, including labor market conditions, inflation pressures and expectations, as well as financial and international dynamics.
Committee members voting in support of this monetary policy action include Chair Jerome Powell, Vice Chair John Williams, Thomas Barkin, Michael Barr, Raphael Bostic, Michelle Bowman, Lisa Cook, Mary Daly, Beth Hammack, Philip Jefferson, Adriana Kugler, and Christopher Waller.
