Fed lowers interest rates by 0.25 percentage points during the FOMC Meeting – first decrease for this year
The Federal Reserve has made its first interest rate cut this year, lowering the target range for the federal funds rate by 25 basis points. The decision was made at the Federal Open Market Committee (FOMC) meeting, and the new target range is now between 4% and 4.25%.
This move comes amid concerns that the labor market may be softening, with recent U.S. jobs data suggesting a weak labor market. The unemployment rate has edged up but remains low, according to the committee.
Inflation has moved up and remains somewhat elevated, the committee noted. However, Fed Chair Jerome Powell had previously signaled that they were likely to lower interest rates due to the rising downside risk in the labor market.
All Fed officials voted in favor of a 25 basis points cut except Stephen Miran, who dissented in favor of a 50 basis points cut. This decision comes after a 50 basis points cut in September of the previous year and a 25 basis points cut in December of the same year.
The decision also comes as U.S. President Donald Trump had urged Powell to make a higher Fed rate cut, but the Fed only made a 25 basis points cut. The Bitcoin price dropped sharply following the Fed rate cut decision, from around $116,000 to $115,500.
CME FedWatch data shows a 93.2% chance of a 25 basis points Fed rate cut at the October FOMC meeting, bringing the benchmark rate to 3.75% and 4%. The Federal Reserve's median economic projections suggest an additional 50 basis points Fed rate cut this year, potentially dropping interest rates to 3.6%.
Despite the search results not containing information about the expected spokesperson or contact person who will comment on the progress possibilities of committee positions on the saving rate shift in December, the committee's decision is expected to have significant implications for the U.S. economy.
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