A divided Federal Reserve lowered interest rates a notch today but didn’t clearly signal that another cut was in store
A divided Federal Reserve lowered interest rates a quarter point on Wednesday but didn’t clearly signal that another cut was in store, immediately drawing a sharp denunciation from President Donald Trump.
Fed officials didn't forecast another rate reduction this year, though they didn't rule out the option completely. That prompted Trump — who has called on the central bank to slash rates to zero or below — to blast the Fed and its chairman, Jerome Powell."Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision! A terrible communicator!" Trump tweeted within minutes of the Fed's move.
The Fed’s move on Wednesday to cut rates by a quarter point is intended to reassure markets, companies and households amid signs that growth is slowing from its 2018 pace, though the central bank continues to expect the economy to expand over the next few years. Fed officials nudged up their forecast of economic growth this year, projecting GDP will increase by 2.2 percent, up from a 2.1 percent estimate in June. Over the next couple of years, the Fed expects growth to drop below 2 percent, but officials stayed well away from forecasting a recession.
As the economic picture grows increasingly complex, Powell is having a tougher time achieving consensus within the central bank’s rate-setting committee. Three members dissented from the decision to lower rates, which follows on another cut in July; Kansas City Fed President Esther George and Boston Fed President Eric Rosengren preferred to hold rates steady, while St. Louis Fed President Jim Bullard wanted a deeper cut.
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