US Federal Reserve announces third interest rate cut this year, lowering it to range of 1.5 to 1.75 percent but signals pause
The Federal Reserve cut its benchmark interest rate on Wednesday for the third time this year to try to sustain the economic expansion in the face of global threats. But it hinted that it won't likely cut again this year.
The economy is in its 11th year of expansion, fuelled by consumer spending and a solid if slightly weakened job market. By cutting rates, the Fed has tried to counter uncertainties heightened by President Donald Trump's trade conflicts, a weaker global economy and a decline in US manufacturing. Powell has pointed to similar rate cuts in 1995 and 1998 as precedents; in both those cases, the Fed cut rates three times. He and most other Fed officials credit their rate cuts with lowering mortgage rates, boosting home sales and generally keeping the economy on track.
Though Trump has argued that this puts the United States at a competitive disadvantage, most economists regard negative rates as a sign of weakness. Another source of global tension has been Brexit, which has also eased. The European Union has agreed to delay the deadline for Britain's exit from the trade bloc from Oct 31 to Jan 31. That postpones what could have been a hugely disruptive exit, right after the Fed meeting ended, that would likely have damaged the UK and European economies.The US economy is still growing, and hiring remains steady, though there have been signs of a slowdown in recent data.
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