Fed cuts rate for first time since financial crisis, leaves door open to further cuts via ReutersTV
WASHINGTON - The Federal Reserve cut interest rates on Wednesday to shore up the economy against risks including global weakness, but the head of the U.S. central bank said he did not view the move as the start of a lengthy series of rate cuts.
In a statement at the end of its latest two-day policy meeting, the Fed said it had decided to cut rates “in light of the implications of global developments for the economic outlook as well as muted inflation pressures.” U.S. stock prices fell after the Fed's statement and during Powell's press conference. The benchmark S&P 500 indexHeading into Wednesday’s Fed decision, the S&P 500 was up about 3% since June 19, when the Fed first signaled a rate cut was likely as it pledged then to “act as appropriate to sustain the expansion.”
Federal Reserve Chair Jerome Powell holds a news conference following the Federal Reserve's two-day Federal Open Market Committee Meeting in Washington, U.S., July 31, 2019. REUTERS/Sarah SilbigerThe Fed’s policy decision drew dissents from Boston Fed President Eric Rosengren and Kansas City Fed President Esther George who argued for leaving rates unchanged.
On the opposite flank, U.S. President Donald Trump is likely to be disappointed the Fed did not deliver the large rate cut he had demanded. Trump has repeatedly harangued the central bank and Powell for not doing enough to help his administration’s efforts to boost economic growth.
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