Fed Lowers Interest Rates for 1st Time in 9 Months
In an 11-1 vote, the Federal Reserve Board agreed to reduce its target lending rate to 4% to 4.25% from the 4.25%-to-4.5% range it has occupied since January, prompted in part by troubling inflation reports.
In a release, the Jerome Powell-chaired committee of 12 governors expresses concern over “somewhat elevated” inflation and notes the job market has slowed but remains strong. The Fed pursues a dual mandate of maintaining a 2% rate of inflation and maximizing employment.
“In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the release states, in part.
Powell has endured direct pressure from President Donald Trump to lower rates in order to stimulate the economy. Powell was appointed as Fed chairman by Trump during the president’s first term; Powell’s term expires in May. Trump’s most recent appointee to the board, Stephen Miran, voted for a half-point decrease in today’s meeting.
