US Fed lowers its base rate for first time in four years

BAKU, Azerbaijan, September 18. The US Federal
Reserve has lowered its base rate for the first time in four years
– by 0.5 percentage points, to 4.75-5.00%, Trend reports.

“Recent indicators suggest that economic activity has continued
to expand at a solid pace. Job gains have slowed, and the
unemployment rate has moved up but remains low. Inflation has made
further progress toward the Committee’s 2 percent objective but
remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation
at the rate of 2 percent over the longer run. The Committee has
gained greater confidence that inflation is moving sustainably
toward 2 percent, and judges that the risks to achieving its
employment and inflation goals are roughly in balance. The economic
outlook is uncertain, and the Committee is attentive to the risks
to both sides of its dual mandate.

In light of the progress on inflation and the balance of risks,
the Committee decided to lower the target range for the federal
funds rate by 1/2 percentage point to 4-3/4 to 5 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. The Committee is
strongly committed to supporting maximum employment and returning
inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the
Committee will continue to monitor the implications of incoming
information for the economic outlook. The Committee would be
prepared to adjust the stance of monetary policy as appropriate if
risks emerge that could impede the attainment of the Committee’s
goals. The Committee’s assessments will take into account a wide
range of information, including readings on labor market
conditions, inflation pressures and inflation expectations, and
financial and international developments.

Voting for the monetary policy action were Jerome H. Powell,
Chair; John C. Williams, Vice Chair; 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. Voting against this action was Michelle W. Bowman, who
preferred to lower the target range for the federal funds rate by
1/4 percentage point at this meeting,” the statement said.