 "US Federal Reserve cuts rate by 0.25% after first post-election meeting, notes easing inflation")
The US Federal Reserve on Thursday (November 7, ET) cut the benchmark lending rates in the country by 0.25 per cent.
With this, the target rate has been brought into the range of 4.5-4.75 per cent.
The rate cut builds on the Fed’s action in September, when it kicked off its easing cycle with a large reduction of half a percentage-point, and penciled in additional cuts for this year.
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Since earlier in the year, labour market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 per cent objective but remains somewhat elevated,” the Federal Open Market Committee (FOMC), which is responsible for changes to the interest rate, said.
“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate,” he statement read.
Federal Reserve Chairperson Jerome Powell, in a press conference, confirmed that US election will have no near-term effect on Fed policy, emphasising the independent nature of the body.
However, he did say that the body “can abandon the urgency seen with the half-point cut in September and take a more deliberate, quarter-point pace with this and future rate cuts.”
“The Federal Reserve continues to lift the foot off the brake pedal, cutting interest rates by one-quarter percentage point, as expected,” he said. “The solid pace of economic growth means the Fed can abandon the urgency seen with the half-point cut in September and take a more deliberate, quarter-point pace with this and future rate cuts.”
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