{"id":158768,"date":"2019-10-30T15:32:13","date_gmt":"2019-10-30T19:32:13","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=158768"},"modified":"2019-10-30T15:32:13","modified_gmt":"2019-10-30T19:32:13","slug":"us-fed-cuts-rate-3rd-time-due-to-global-developments","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/10\/us-fed-cuts-rate-3rd-time-due-to-global-developments\/","title":{"rendered":"US Fed cuts rate 3rd time due to ‘global developments’"},"content":{"rendered":"
October 30, 2019<\/div>
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By CentralBankNews.info<\/u><\/a><\/p>\n

The Federal Reserve, the U.S. central bank, lowered its benchmark federal funds rate for the third time this year and again said this was due to “the implications of global developments for the economic outlook as well as muted inflation pressures.”<\/p>\n

The Federal Open Market Committee (FOMC), the Fed’s policy-making body, cut the fed funds rate by another 25 basis points to 1.50 – 1.75 percent and has now cut it by 75 basis points this year following cuts in July, September and today.<\/p>\n

The FOMC largely reiterated its view from September that the labor market remains strong, economic activity has been rising at a moderate rate, and while household spending has been rising at strong pace, business investment and exports “remain weak.”<\/p>\n

“This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions and inflation near the Committee’s symmetric 2 percent objectives are the most likely outcomes, but uncertainties about this outlook remain,” the FOMC said, reiterating its statement from September and July.<\/p>\n

On both occasions when the Fed cut its rate this year it attributed this to the impact of weak global growth on the U.S. economy along with muted inflation.<\/p>

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Illustrating the continued split within the FOMC, 8 of its 10 members voted in favor of the rate cut while two members, Esther George and Eric Rosengren voted to maintain the rate, as in September.<\/p>\n

The U.S. economy has been slowing in the last two quarters, with real growth in the third quarter today estimated at 2.0 percent year-on-year, down from 2.3 percent in the second quarter and 2.7 percent in the first quarter.<\/p>\n

Although overall growth was better than expected, helped by a 2 percent rise in government spending, data showed consumer spending easing to 2.9 percent growth from 4.6 percent in the second quarter and non-residential fixed investment falling 3.0 percent, reflecting the widespread decline in global investments amid uncertainty over trade.<\/p>\n

But the jobs market in the U.S. is still healthy, with data today showing private businesses hiring 125,000 workers in October from September’s revised 93,000. In September the U.S. unemployment rate fell to 3.5 percent from 3.7 percent in the previous three months.<\/p>\n

As in most of the world, inflation is stable and below central bank targets, with U.S. headline inflation steady at 1.7 percent in September and August, below the Fed’s 2.0 percent target.
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The Board of Governors of the Federal Reserve System released the following statement:<\/p>\n

“Information received since the Federal Open Market Committee met in September indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.<\/div>\n
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-1\/2 to 1-3\/4 percent. This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.<\/div>\n
In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.<\/div>\n
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles. Voting against this action were: Esther L. George and Eric S. Rosengren, who preferred at this meeting to maintain the target range at 1-3\/4 percent to 2 percent.”<\/div>\n

www.CentralBankNews.info<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By CentralBankNews.info The Federal Reserve, the U.S. central bank, lowered its benchmark federal funds rate for the third time this year and again said this was due to “the implications of global developments for the economic outlook as well as muted inflation pressures.” The Federal Open Market Committee (FOMC), the Fed’s policy-making body, cut the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-158768","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/158768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=158768"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/158768\/revisions"}],"predecessor-version":[{"id":158770,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/158768\/revisions\/158770"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=158768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=158768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=158768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}