US Fed lowers interest rates by 0.5 bps to 4.75-5%

In its latest statement, the Federal Open Market Committee (FOMC) noted that the economy continues to expand at a steady pace, though job gains have slowed, and the unemployment rate has edged up, albeit remaining low by historical standards. The Committee expressed increased confidence that inflation is sustainably moving toward its 2 per cent goal, though it acknowledged that inflation remains somewhat elevated.

The decision comes as the Federal Reserve balances its dual mandate of maximum employment and stable inflation. While inflation is making progress, the economic outlook remains uncertain. The Committee will closely monitor incoming data to assess whether further adjustments to the federal funds rate are necessary.

In addition to the rate cut, the Federal Reserve remains committed to reducing its holdings of Treasury securities, agency debt, and mortgage-backed securities as part of its broader monetary policy strategy, the FOMC statement further stated.

The Federal Reserve’s next steps will be informed by economic data and developments in labour market conditions, inflation, and financial and international factors.

ALCHEMPro News Desk (KD)