USA: Fed Cuts Rate by Quarter Point

The Federal Reserve (Fed) has decided to cut interest rates by a quarter point. The US central bank explains that recent indicators point to stable economic growth, while the unemployment rate has increased, although it remains low, and inflation continues to approach the 2% target, but is still slightly elevated.

“In support of its goals,” the Fed said in a statement, “the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 4½ to 4¾ percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities.”

This is the second consecutive easing of monetary policy, coming a day after Donald Trump’s convincing victory in the presidential election. And regarding the political-administrative earthquake the tycoon has promised to trigger, Fed President Jerome Powell explained that if Trump asked him to leave office, the answer would be a firm “no,” adding that removing a Federal Reserve president “is not authorized by law.”