The Federal Reserve is reducing interest rates for the third time this year to stimulate the US economy amid repeated Trump attacks
- The Federal Reserve lowered its benchmark interest rate this Wednesday for the third time in an attempt to stimulate the US economy
- The Fed cut interest rates by 25 basis points to a range of 1.5 percent to 1.75 percent, as expected, if & # 39; insurance & # 39; against ongoing risks & # 39; s
- Fed Chairman Jerome H. Powell said protection was needed because uncertainty is still looming over the trade war with China, which can still harm the economy
- President Donald Trump has put pressure on Powell to lower interest rates for the US presidential election
- & # 39; None & # 39; guts, & # 39; no sense, no vision, & # 39; Trump shot earlier, mocking Powell for making movements that were considered modest
The Federal Reserve lowered its benchmark interest rate this Wednesday for the third time to boost the US economy as the trade war with China continues and amid slower global growth.
Fed Chairman Jerome H. Powell said that this latest cut & # 39; appropriate & # 39; was, indicating that there will probably be no more cuts this year, after being confronted with increased pressure from President Donald Trump to lower rates as the nation enters the 2020 presidential election.
The feed lowered the rate by 25 basis points to a range of 1.5 percent to 1.75 percent, as expected. Powell said it & # 39; insurance & # 39; was against ongoing risk & # 39; s.
Fed Chairman Jerome H. Powell said the latest interest rate cut & # 39; appropriate & # 39; was, indicating that there is likely to be no more this year after being confronted with increased pressure from President Donald Trump to lower rates as the nation joins the 2020 presidential election
President Donald Trump, via Twitter, had renewed his attacks on the Fed in the run-up to Wednesday's announcement because it had not lowered its benchmark interest rate to zero the last time an adjustment was made in September
Interest rates on residential mortgages, car purchases and other debts generally follow the adjustments to the Fed benchmark.
In this case, lowering interest rates will probably make it cheaper for Americans to borrow money. House prices have started to rise after the Fed has lowered interest rates twice since July.
The announced third cut this year returns four interest rate hikes that the Fed implemented last year in response to a strengthening economy.
Powell said lowering the rate again & # 39; insurance & # 39; was, or protection was needed because, weaknesses in global growth and trade developments have weighed the economy and brought ongoing risks & # 39; s.
His remarks referred to President Trump's still unresolved trade war with China and weaker growth in Europe and Asia.
The Fed's report of a break in interest rate cuts means that there will probably no longer be any discounts this year because & # 39; incoming information on the economy remains largely consistent with our outlook & # 39 ;, Powell said.
& # 39; If developments occur that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a predetermined rate & # 39 ;.
Powell previously pointed to similar interest rate cuts in 1995 and 1998 as precedents; in both cases the Fed lowered interest rates three times.
The main issue that led to the interest rate cut was whether the Fed had taken out adequate insurance policies.
Trump, via Twitter, had renewed its attacks on the Fed in the run-up to Wednesday's announcement because the benchmark rate had not been lowered closer to zero the last time an adjustment was made in September.
& # 39; Jay Powell and the Federal Reserve fail again. No & # 39; guts & # 39 ;, no sense, no vision! A terrible communicator & # 39 ;! Trump wrote on Twitter.
Trump has unfavorably compared the Fed's actions to central banks in Europe and Japan, which have lowered their interest rates to negative territory.
Although Trump has suggested that this puts the United States at a competitive disadvantage, most economists view negative interest rates as a sign of weakness.
Some international tensions have decreased since the last meeting of the Fed in mid-September, which may suggest that further interest rate cuts are less necessary.
The US and China reached a temporary ceasefire earlier this month and are working on a provisional agreement that could be signed in November by Trump and President Xi Jinping.
However, it is unclear how meaningful such an agreement could be, and Trump did not drop its threat to impose new rates for Chinese goods on December 15.
Another source of international tension is the Brexit, which has also declined.
The European Union agreed on Tuesday to postpone the deadline for Great Britain's exit from the trading bloc until January 31 from this Thursday.
That postpones a potential disruptive exit immediately after the Fed meeting was completed, which would probably have damaged the British and European economies.