Political Uncertainty Influences US Federal Reserve Rate Cut Decision
US Federal Reserve Responds to Political Uncertainty
The US Federal Reserve, amidst political uncertainty, has taken significant measures to ease monetary policy with a quarter-point rate cut on Thursday. This decision reflects an attempt to combat ongoing inflationary pressures and support the labour market.
Inflation and Economic Growth Outlook
In its recent statement, policymakers voted unanimously to lower the central bank’s key lending rate between 4.50% and 4.75%. The Fed noted, “Labour market conditions have generally eased”, aligning with its strategy to guide inflation towards the long-term target of 2%.
- Inflation Gauge: The Fed's preferred measure showed inflation eased to 2.1% in September.
- Economic Growth: Despite challenges, economic growth remains robust.
- Labour Conditions: A slowdown in hiring last month, largely due to adverse weather and a recent labour strike, was highlighted.
Future Projections
After kicking off its easing cycle in September with a notable half-percentage-point cut, the Fed is planning more rate cuts throughout the year, as cautioned by Fed chair Jerome Powell. He will face questions regarding the potential economic implications of Donald Trump’s victory in the upcoming presidential race.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.