Federal Reserve cuts interest rates amid uncertainty about economic outlook - World News Network

New Delhi [India], October 30 (ANI): The Federal Reserve has decided to lower the target range for the federal funds rate by one-fourth of a percentage point to 3.75-4 per cent, marking a shift in its monetary policy stance amid signs of a moderating economy. The decision, according to a Federal Reserve press release on Wednesday, comes as job growth slows and unemployment edges slightly higher, though it remains low through August.
Inflation, which had cooled earlier this year, has picked up again and remains somewhat elevated. In this context, the Federal Open Market Committee said it aims to balance its goals of maximum employment and price stability while navigating changing economic risks.
The Committee emphasised that it will closely monitor new data and evolving economic conditions before making further policy changes. It also announced plans to conclude the reduction of its aggregate securities holdings on December 1.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run,” the release said. It noted that uncertainty about the economic outlook remains elevated, and the risks to employment have increased in recent months. The policymakers acknowledged that both sides of their dual mandate face challenges that require careful attention. “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months,” the release said.
In outlining its approach, the Fed stated it would remain ready to adjust monetary policy as necessary if new risks arise that could prevent it from meeting its goals.
“The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” the release noted.
Voting for the monetary policy action were Chair Jerome H. Powell, Vice Chair John C. Williams, and Governors Michael S. Barr, Michelle W. Bowman, Susan M. Collins, Lisa D. Cook, Austan D. Goolsbee, Philip N. Jefferson, Alberto G. Musalem, and Christopher J. Waller.
Voting against this action were Stephen I. Miran, who favoured a larger 0.5 percentage point cut, and Jeffrey R. Schmid, who preferred to leave rates unchanged. (ANI)

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