The Federal Reserve cut interest rates for the third time this year today but failed to signal that another one would be coming later this year, a move that meets market expectations but is bound to trigger another angry broadside from President Donald Trump.
Trump has pushed relentlessly for the Fed to lower rates to zero, an extreme measure that the central bank would be unlikely to take unless the economy were in serious trouble.
Instead, the Fed’s rate-setting committee broke with its recent practice and pivoted to a more passive statement about its need to boost the economy. That suggests the central bank is taking a break from further decreases until there’s evidence that the economy really needs yet another stimulus.
With today’s cut, the central bank has lowered its main borrowing rate by three-quarters of a percentage point since July, putting it between 1.5 percent and 1.75 percent.
That stimulus is intended to aid the economy in the face of a contracting manufacturing sector and weak business investment – the result of extended trade tensions and slowing growth in other countries. Inflation has also persistently come in below the Fed’s 2 percent target, which further feeds the case for lowering rates.
But still-healthy consumer spending and a 50-year-low unemployment rate suggest the economy isn’t in dire need of intervention.
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The Federal Reserve cut interest rates again, a move that meets market expectations but is bound to trigger another angry broadside from Trumphttps://t.co/qZzTUFPd2x
— POLITICO (@politico) October 30, 2019
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