Brian Cheung for Yahoo Finance:
The Federal Reserve cut interest rates by 25 basis points in its policy-setting meeting on July 31, marking the first time the central bank has reduced the benchmark interest rate since it battled the financial crisis in 2008. The Fed also decided to pre-emptively end its process of shrinking its balance sheet, a process known as quantitative tightening, two months ahead of schedule.
The cut comes as the Fed continues to worry about a possible slowdown in the U.S. economy… On the labor market, the Fed said job gains are still “solid.” The June jobs report received since the last Fed meeting showed an estimate-beating 224,000 new jobs with unemployment moving up only slightly to 3.7%. The Fed also said the consumer remains a bright spot, with household spending still growing relative to earlier this year.
The Fed reiterated that it will “act as appropriate to sustain the expansion,” adding new language in saying that this priority will be in focus as “the committee contemplates the future path of the target range for the federal funds rate.”
MacDailyNews Take: A bit of macroeconomic insurance? The Fed’s next meeting is scheduled for September 18th.