US Federal Reserve cuts interest rates for second time

BBC News Finance 1 month ago

The US central bank has cut interest rates for the second time since 2008 amid concerns about slowing global growth and trade wars.

The Federal Reserve lowered the target range for its key interest rate by 25 basis points, to between 1.75% and 2%.

The bank said the cut is aimed at shoring up the US economy, amid "uncertainties" about future growth.

But officials were divided about the move and over the need for future rises.

Seven members of the Federal Reserve Open Markets Committee, which sets the rates, voted in favour of Wednesday's cut, including Federal Reserve chair Jerome Powell.

Two members wanted to hold the rate steady, while one wanted to cut further.

Cutting rates - which US President Donald Trump has pushed the Fed to do more aggressively - helps fuel economic activity, by making borrowing money cheaper for businesses and consumers alike.

But with interest rates in the US already low by historic standards - and much of the economic uncertainty caused by White House actions - analysts have raised questions about how much rate cuts will help.

US markets fell after the Fed announced the cut on Wednesday.

Mr Trump, who has repeatedly attacked Mr Powell for not cutting rates faster, immediately lambasted the bank's decision on Twitter: "Jay Powell and the Federal Reserve Fail Again. No "guts," no sense, no vision! A terrible communicator!"

Policy shift

The Fed's decision to lower rates on Wednesday followed a similar cut in July and marks a reversal from its policy only a year ago, when America's healthy economy had convinced policy makers to enact a series of small hikes.

US federal funds rate

But US economic growth slowed to 2% in the second quarter, job creation has slipped and inflation remains lower than US policymakers would like.

In recent days, parts of the financial markets have also shown signs of a cash-crunch, temporarily pushing short-term interest rates above the Fed's target and prompting the bank to intervene.

In economic projections released on Wednesday, Federal Reserve policymakers said they expect the economy to grow 2.2% this year, faster than they forecast in June.

Source link
Read also:
Business Insider › Finance › 1 month ago
The Federal Reserve lowered interest rates during its September meeting. This is the second time since the Great Recession that rates have been lowered, following the last cut in July. The Federal Open Market Committee, the policymaking branch of the...
Business Insider › Finance › 1 month ago
The Federal Reserve's lowering of the federal funds rate will lead to an interest rate decrease for borrowers. Borrowers may see interest rates decrease on credit cards, variable rate student loans, auto loans, small business loans, and home equity...
Business Insider › Finance › 1 month ago
The Federal Reserve announced on Wednesday that it would cut interest rates for the second time in as many months. The cut brings the range for the benchmark interest rate to between 1.75% and 2%, the lowest level since before the Great Recession...
RT › Finance › 1 month ago
The US Federal Reserve has cut interest rates for the second time since 2008, to a range of 1.75 to 2 percent. The move was met with disdain from US President Donald Trump, who was hoping for a larger cut. Read Full Article at
USA Today › Finance › 1 month ago
Stocks are dropping after the Federal Reserve cuts its benchmark interest rate for a second time this year.
The Independent › 1 month ago
The Federal Reserve has once again cut interest rates for a second time amid fears of a global economic downturn and concerns Donald Trump's trade wars with China could risk further instability among world markets.
CNN › Finance › 1 month ago
The Federal Reserve on Wednesday cut interest rates for the second time in two months amid growing worries about a potential global slowdown.
Reuters › Finance › 3 weeks ago
The Federal Reserve should lower interest rates further because the U.S. economy has not yet fully reached its potential, Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday.
One America News Network › Finance › 1 week ago
(Reuters) - The U.S. Federal Reserve should continue to cut interest rates in order to offset growing risks to the economy, Minneapolis Federal Reserve Bank President Neel Kashkari said on Monday.
Forbes › Finance › 1 day ago
Lenders never advertise their average interest rates or their low credit score borrower interest rates. The best rates for the best borrowers always make the headlines, that’s how it works. A low credit score may mean a higher interest rate.
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google