Recent data indicates that economic activity has maintained solid growth. Since earlier in the year, labor market conditions have generally relaxed, with a slight rise in the unemployment rate, which remains low overall. Inflation has made progress toward the Committee's 2 percent target but remains somewhat above that level.
US Federal Reserve cuts rates by 25 basis points
The Committee aims to achieve maximum employment and a 2 percent inflation rate over the long term. It assesses that risks to achieving these goals are relatively balanced. Given the uncertain economic outlook, the Committee remains alert to potential risks to both aspects of its mandate.
To support these objectives, the Committee decided to lower the target range for the federal funds rate by 0.25 percentage points to between 4.5 and 4.75 percent. When considering further adjustments to this rate, the Committee will carefully evaluate new data, the evolving economic outlook, and the balance of risks. The Committee will also continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities, reaffirming its strong commitment to achieving maximum employment and returning inflation to the 2 percent goal.
Next decision will be data dependent
As it assesses the appropriate stance on monetary policy, the Committee will monitor incoming information for its implications on the economic outlook. It remains ready to adjust its policy approach if new risks threaten the Committee's goals. This assessment will incorporate a broad range of factors, including labor market conditions, inflation pressures and expectations, and financial and global developments.
