Full text of the Federal Reserve decision: Cut interest rates by 50 basis points, committed to maximizing employment support
The Federal Reserve announced on September 19 that it would cut the federal funds rate by 50 basis points to 4.75%-5.00%, marking the first rate cut since March 2020. Despite slowing job growth and a slight increase in unemployment, economic activity remains robust. The Committee is committed to maximizing employment and achieving a 2% inflation target in the long run, and will continue to monitor economic outlook and risks to adjust monetary policy in a timely manner. Supporters of the rate cut include Chairman Powell, while dissenters include Michelle W. Bowman
On September 19, the Federal Reserve began a rate-cutting cycle, lowering the federal funds rate by 50 basis points to 4.75%-5.00%, marking the first rate cut since March 2020.
Full Text of the Rate Decision
Recent indicators show that economic activity continues to expand at a moderate pace. While job growth has slowed and the unemployment rate has slightly increased, it remains at a low level. Inflation has further approached the Committee's 2% target but remains slightly above the target.
The Committee's objectives are to achieve maximum employment over the long term and 2% inflation. The Committee is confident in the continued progress towards the 2% inflation target and believes that the risks to achieving the employment and inflation goals are broadly balanced. Given the uncertainty in the economic outlook, the Committee is closely monitoring the risks on both sides of its dual mandate.
Considering the progress of inflation and the balance of risks, the Committee has decided to lower the federal funds rate target range by 50 basis points to 4.75%-5%. When considering further adjustments to the rate target range, the Committee will carefully assess the latest data, changes in the economic outlook, and the balance of risks. The Committee will continue to reduce its holdings of Treasury securities, agency debt, and agency mortgage-backed securities. The Committee remains committed to supporting maximum employment and returning inflation to the 2% target.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the impact of new information on the economic outlook. If risks emerge that could impede the Committee's goals, the Committee is prepared to adjust its monetary policy stance as appropriate. The Committee's assessment will take into account a wide range of information, including labor market conditions, inflation pressures and expectations, and developments in financial and international dynamics.
Members supporting this monetary policy action include: Chairman Jerome Powell, Vice Chairman John C. Williams, Thomas I. Barkin, Michael S. Barr, Raphael W. Bostic, Lisa D. Cook, Mary C. Daly, Beth M. Hammack, Philip N. Jefferson, Adriana D. Kugler, and Christopher J. Waller. The dissenting member to this decision is Michelle W. Bowman, who leaned towards lowering the federal funds rate target range by 25 basis points at this meeting.