Fed announces 25 basis points cut for second rate cut this year

Release time:

2019-09-21

Xinhua News Agency, Washington, September 18, the U.S. Federal Reserve announced on the 18th that it will lower the target range of the federal funds rate by 25 basis points to a level of 1.75 to 2 percent. This is the second time the Fed has cut interest rates this year, in line with market expectations.

The Federal Reserve issued a statement after the end of its regular monetary policy meeting that day, saying that data since July showed that US economic activity continued to grow moderately, household spending grew strongly, the job market grew steadily, and the unemployment rate remained low. However, corporate fixed asset investment and exports have weakened. Over the past 12 months, both headline inflation and core inflation excluding food and energy prices have been below 2 per cent.

The statement said that considering the impact of the global situation on the US economic outlook and moderate inflationary pressures, the Fed decided to cut interest rates, but the uncertainty facing the US economy still exists. Regarding the future trend of the federal funds rate, the Federal Reserve stated that it will continue to pay attention to the US economic situation and take appropriate actions to maintain the US economic expansion.

Federal Reserve Chairman Powell said at a press conference that day that the Fed's interest rate cut is mainly to deal with the risks of trade policy uncertainty, the slowdown in global economic growth and low inflationary pressures to maintain the U.S. economic expansion.

The quarterly economic forecast released by the Federal Reserve on the same day showed that the US economy will grow by 2.2 per cent and 2 per cent this year and next, respectively, while the unemployment rate will remain at 3.7 per cent.

On July 31 this year, the Federal Reserve announced its first interest rate cut since December 2008, lowering the target range for the federal funds rate by 25 basis points to a level of 2 to 2.25 percent. Industry insiders expect the Fed to cut interest rates once this year.

(Source: Xinhua)

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