(AURN News) — The Federal Reserve lowered interest rates by a quarter percentage point on Wednesday, while emphasizing continued vigilance over inflation that remains above the central bank’s 2% target.
Federal Reserve Chair Jerome Powell highlighted the economy’s resilience amid the rate decision. “Recent indicators suggest that economic activity has continued to expand at a solid pace,” Powell said, noting that “GDP rose at an annual rate of 2.8 percent in the third quarter, about the same pace as in the second quarter.”
The Federal Open Market Committee’s move comes amid mixed economic signals. While consumer spending remains strong and business investment has improved, Powell pointed out that “activity in the housing sector has been weak.”
In explaining their approach to future policy decisions, Powell stressed the delicate balance the Fed must maintain. “We know that reducing policy restraint too fast or too much could hinder progress on inflation. At the same time, reducing policy restraint too slowly or too little could unduly weaken economic activity and employment,” he said.
The Federal Reserve’s official statement indicates that future decisions will be based on comprehensive economic data. “The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” the Fed stated.
Markets initially responded negatively to the announcement on Wednesday, but stocks rebounded in Thursday morning trading.
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