The US Federal Reserve has cut interest rates by a quarter point, in an expected move as a part of what chairman Jerome Powell has characterised as a “mid-cycle adjustment” amid a maturing economic expansion.
The central bank’s decision lowers the central bank’s benchmark by 25 basis points, and puts it in the range of 1.5 to 1.75 per cent. The move had been expected by those in the financial industry.
In announcing its decision, the Federal Open Market Committee changed the language it used to describe its future plans, and cut a clause that said the Fed is committed to “act as appropriate to sustain the expansion” of the economy. The phrase was used by Mr Powell to set the stage for a July rate cut, and has been used in official documents since.
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That clause was changed to be more moderate, and indicates that the Fed may not be intent on further cuts going forward, according to CNBC.
“The Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate,” a statement from the Fed reads.
The US economy is in its 11th year of expansion, which has been made possible by solid consumer spending and a relatively strong job market.
Mr Powell has said that the US economy remains strong, though has noted that some factors could lead to disturbances. Those factors include Donald Trump’s ongoing trade war with China, a decline in US manufacturing, and a weaker global economy.