Fed cuts key interest rate a quarter-point but signals ongoing concerns about inflation
The Federal Reserve announced Thursday it was lowering its key interest rate by a quarter-point — a widely expected move that coincides with inflation approaching the central bank's 2% goal.
The Federal Reserve announced Thursday it was lowering its key interest rate by a quarter-point — a widely expected move that coincides with inflation approaching the central bank's 2% goal.
In their statement, Fed officials noted that inflation remains "somewhat elevated" while unemployment has "moved up but remains low." They did note that conditions in the labor market have "generally eased" — perhaps a nod to signs of growing softness in hiring.
Some market participants noted the officials removed key language that had indicated it was still confident it would hit the 2% inflation target.
In a note to clients, Omair Sharif, president of Inflation Insights, said that may signal a new willingness by the Fed to forgo a widely expected additional quarter-point cut next month: “If that is the case, then the Committee is likely closer to a pause.”
In other words, the central bank would keep rates elevated.
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