The Federal Reserve cut rates by an expected quarter-point on Wednesday, placing the new range at 3.5%-3.75% after a 9-3 vote.
“Available indicators suggest that economic activity has been expanding at a moderate pace,” the Fed said in a statement. “Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated.”
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months,” the statement read, going on to reiterate that the Committee is “strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
“The Committee judges that reserve balances have declined to ample levels and will initiate purchases of shorter-term Treasury securities as needed to maintain an ample supply of reserves on an ongoing basis,” it added.
Voting against the action were Fed Governor Stephen Miran, who preferred to lower the rate by half a percentage, as well as Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid, who “preferred no change to the target range for the federal funds rate at this meeting,” the statement noted.
The Federal Reserve cut interest rates in October, dropping them 3.75%-4%. It also lowered them in September by half a percentage point.
