Fed cuts interest rates by quarter point
SMBC chief economist Joe LaVorgna provides his expectations for the Federal Reserve rate decision and weighs in on the state of the labor market on 'The Big Money Show.'
The Federal Reserve on Thursday announced its second consecutive interest rate cut, lowering the benchmark rate by 25 basis points amid economic data showing signs that inflation and the labor market are cooling.
With the 25-basis-point cut, the benchmark federal funds rate will sit at a range of 4.5% to 4.75%. The Fed's move follows a larger-than-normal cut of 50 basis points at its September meeting, which was the first rate cut since March 2020 and brought rates down from a range of 5.25% to 5.5% — the highest level since 2001.
The Federal Open Market Committee (FOMC), the Fed's policymaking arm, noted that «labor market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee's 2 percent objective but remains elevated.»
Policymakers noted in the announcement that they're «attentive to the risks to both sides of its dual mandate» — which is to promote maximum employment and stable prices. All FOMC members voted in favor of the rate cut.
FED'S FAVORED INFLATION GAUGE SHOWED PRICE GROWTH CONTINUED TO SLOW IN SEPTEMBER
Federal Reserve Chair Jerome Powell said the central bank will tailor its adjustments to interest rates based on economic conditions. (Roberto Schmidt/AFP via Getty Images / Getty Images)
Fed Chair Jerome Powell said at the press conference that the «economy is strong overall and has made significant progress toward our goals over the past two years.»
«The unemployment rate is notably higher than it was a year ago, but has edged down over the past three
Read more on foxbusiness.com
