Federal Reserve lowers US interest rates by 25 points

The Federal Open Market Committee (FOMC) of the Federal Reserve of the United States (FED) decided to lower interest rates by 25 basis points, to a target range between 1.50% and 1.75%, as reported this Wednesday. This is the third consecutive reduction made by the monetary authority this year.

The FED explained that in recent weeks the labor market has remained “solid” and the country’s economic activity continues to grow at a “moderate” pace. However, the institution has noted that business investment and exports “have remained weak.”

Thus, the US Central Bank has justified its decision on the “implications” of global developments for economic prospects, as well as the “weak” inflationary pressures. In order to decide future adjustments in the price of money, the monetary authority has stressed that it will monitor the implications of the new data for the economic outlook.

“This action supports the Committee’s vision that a sustained expansion of economic activity. Strong labor market conditions and inflation close to the 2% symmetric objective are the most possible developments, but that this forecast remains uncertain,” according to FED.

As in the last meetings, the decision has been taken again without consensus. The majority of central bankers have voted in favor of this downgrade of 25 basis points, while the president of the Federal Reserve Bank of Kansas City, Esther George, and the president of the Federal Reserve Bank of Boston, Eric Rosengren, are have shown in favor of keeping rates unchanged.

K. Tovar

Source: Cinco Días