spot_imgspot_img

Federal Reserve confirms quarter-point interest rate cut

spot_img

The Federal Reserve confirmed a quarter-point interest rate cut on Thursday, lowering the target range from 4.5% to 4.75%, the second cut made in 2024.

The Federal Reserve’s decision to cut rates reflects the ongoing strategy to balance economic growth and inflation control. The cut is intended to maintain economic momentum as inflation nears the Fed’s targeted goal of 2%.

Chairman Jerome Powell confirmed the cut at a press conference. He emphasized that the decision is meant to support the economy as inflation continues to moderate.

Powell said the cut was to encourage borrowing and spending without sparking a new wave of inflation. Inflation is 2.4% yet considerably lower than the 9.1% of June 2022 that was highest in 40 years.

“We’re carefully navigating a balance to sustain economic momentum without reigniting inflation,” Powell said.

Monetary policy is known as “restrictive” because it sets interest rates high enough to slow economic activity while curbing inflation. By lowering borrowing costs, the Federal Reserve is aiming to stimulate consumer spending and business investment, which are both essential to the economy’s growth.

Real Gross Domestic Product grew 2.8% at an annual rate in the third quarter of 2024, according to the latest Bureau of Economic Analysis data. This is down slightly from the reported 3% in the second quarter.

The central bank would continue its gradual approach, with Powell suggesting another possible cut in December, depending on whether inflation and employment metrics shift.

The Federal Reserve is independent of politics, with no mention of the recent election or answers to how President-elect Donald Trump’s policies will or could impact current numbers.

Powell said the election has no effect on policy decisions. Powell said that the indicators suggested that economic activity continued to expand at a solid pace and that inflation has made progress toward the committee’s 2% objective but remains somewhat elevated from the peak of 7% to 2.1% as of September.

Separate of the Federal Reserve, the immediate impact financially of Trump’s win was the biggest gain for the dollar in eight years and record highs on Wall Street. Bitcoin also surged, a campaign promise surely fueling the cryptocurrency market.

Powell said he feels next year could be stronger than this year.

Inflation has been decelerating over the last two years, but these actions come amid global economic uncertainties and a complex post-pandemic environment.

“It takes some years of real wage gains for people to feel better,” Powell said. “That’s what we’re trying to create. And I think we’re well on the road to creating that.”

The next Federal Open Market Committee meeting is scheduled for Dec. 18.

DON’T MISS OUT

Be the first to know about the latest news, giveaways, events, and updates from The Black Chronicle!

We don’t spam! Read our privacy policy for more info.

spot_img
spot_img

Hot this week

African and Caribbean Nations Call for Reparations for Slave Trade, Propose Global Fund

Nations across Africa and the Caribbean, deeply impacted by...

Health care company agrees to pay $22.5 million to settle claims of over billing

A health care company agreed to pay nearly $22.5...

Sports betting expert offers advice on paying taxes for gambling winnings

(The Center Square) – Tax season is underway, and...

Entertainment district benefits don’t outweigh the cost, economists say

(The Center Square) — Weeks later, after more details...

Business association ‘disappointed’ by WA L&I’s proposed workers comp rate hike

(The Center Square) – The Association of Washington Business...

Republicans sweep Texas races statewide, school choice likely on the horizon

(The Center Square) – Texas voters overwhelmingly reelected Republicans...

Tennessee economists present rosy revenue picture

(The Center Square) – Tennessee's top economists presented different...

Casey disputes McCormick’s U.S. Senate win

(The Center Square) – U.S. Sen Bob Casey Jr....

Helene: Federal legislation seeks $15B in assistance

(The Center Square) – Two bills have been filed...

Caddo Commission postpones allocating funds for community lighthouse project

(The Center Square) — The Caddo Parish Commission postponed...

House Speaker Johnson wins reelection handily in Louisiana’s 4th district

(The Center Square) — U.S. Rep. Mike Johnson, R-La....

Hernandez ahead in Phoenix city council race

(The Center Square) – Arizona state Sen. Anna Hernandez...

More like this
Related

Republicans sweep Texas races statewide, school choice likely on the horizon

(The Center Square) – Texas voters overwhelmingly reelected Republicans...

Tennessee economists present rosy revenue picture

(The Center Square) – Tennessee's top economists presented different...

Casey disputes McCormick’s U.S. Senate win

(The Center Square) – U.S. Sen Bob Casey Jr....

Helene: Federal legislation seeks $15B in assistance

(The Center Square) – Two bills have been filed...