Online Reporter
Federal Reserve officials delivered their second consecutive interest-rate reduction to support a softening labour market, and said they would stop shrinking the central bank’s portfolio of assets on 1 December.
In their post-meeting statement, Fed policymakers on Wednesday repeated their assessment that “job gains have slowed” and said “risks to employment rose in recent months”.
Officials characterised economic growth as “moderate” and said inflation “has moved up since earlier this year and remains somewhat elevated”.
The Federal Open Market Committee voted 10-2 to lower the target range for the federal funds rate by a quarter percentage point to 3,75 percent to 4 percent.
Fed officials on both ends of the policy spectrum opposed the decision.
Governor Stephen Miran, who joined the central bank last month and is on unpaid leave from his post as chair of the White House Council of Economic Advisers, dissented again in favour of a larger, half-point reduction. Kansas City Fed President Jeff Schmid said he preferred not to cut rates at all, after supporting last month’s rate reduction.
The S&P 500 held gains, while Treasury yields and the dollar moved higher.
Fed chair Jerome Powell will hold a press conference at 2:30 p.m. in Washington.
Fed officials lowered rates last month for the first time this year after a marked cooldown in hiring raised worries about fragilities in the labour market.
Wednesday’s move was widely anticipated after Powell said earlier this month that employment could weaken further. Additional declines in job openings, he said, “might very well show up in unemployment”.
Fed officials are divided, however, over how much more to ease.
Several policymakers have cautioned against lowering borrowing costs too rapidly with inflation still running above the Fed’s 2 percent target. — Moneyweb
