The United States Federal Reserve reduced its reference interest rate by 25 basis points, to a range between 4.25% and 4.50%, in a context of strength in economic activity, strength in the labor market and with inflation moving towards the objective of 2%.
According to the Federal Reserve’s monetary policy announcement, recent indicators suggest that since the beginning of the year, economic activity has continued to expand at a solid pace, labor market conditions have generally improved, and the unemployment rate has increased, but remains low, while inflation has moved towards the 2% objective, although it remains “somewhat” high.
In this context, the Open Market Operations Committee (FOMC) considered that the risks to achieving its employment and inflation objectives are approximately balanced and although the economic outlook is uncertain, it is attentive to the risks for both sides of its dual mandate. .
The US central bank also said it will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities, and reiterated that it is firmly committed to supporting maximum employment and returning inflation to its target of 2%.
In this context, the FOMC will closely monitor the implications of the information it receives on the economic outlook and assured that it will be prepared to adjust the stance of monetary policy as appropriate if risks arise that could impede the achievement of objectives.
The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
They voted in favor of cutting the benchmark interest rate: Jerome H. Powell, chairman; John C. Williams, vice president; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary J. Daly; Philip N. Jefferson; Adriana D. Kugler; and Christopher J. Waller.
Voting against the measure was Beth M. Hammack, who preferred to keep the target range for the federal funds rate between 4.5% and 4.75%.
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