FOMC cuts rates by a quarter point; Powell speaks; See the Presser

On By Littum

The Federal Reserve cut interest rates by a quarter of a percentage point on Thursday in a move that maintains flexibility as officials grapple with a cooling labor market and lower inflation.

Tuesday’s election did not change the Federal Open Market Committee’s policy path, with officials moving ahead with a rate cut as expected before the vote. The latest decision means that the target range for the federal funds rate is now 4.5%-4.75%.

The 25 basis point cut comes after Fed officials cut interest rates by an aggressive 50 basis points at their previous meeting in September.

In the weeks since the September meeting, a number of policymakers have stressed that cuts of half a percentage point would not be the norm, noting that the pace of pulling back on the high interest rates imposed in the Bank’s fight against inflation should be “gradually.”

It was the first meeting of the FOMC since former President Donald Trump’s election victory. Policymakers have repeatedly said that the Fed is apolitical and that their demands for interest rates are driven by economic conditions.