The Federal Reserve lowered interest rates by 0.25% for the first time since December 2008. But at the press conference following the meeting of the Federal Open Market Committee, Fed Chairman Jerome Powell said that this rate cut was a timely adjustment and not necessarily the beginning of a prolonged cycle of rate cuts.
Wall Street stocks fell sharply during Powell’s intervention because traders interpreted that there would be no further rate cuts this year. The Fed president cited the global economic slowdown, trade war and moderate inflation as reasons to reduce interest rates by 25 basis points.
Powell also spoke about Donald Trump’s political pressure on the central bank and said the rate cut was not the result of the president’s calls, who had requested a 50 basis point reduction a day before the Fed meeting.
However, it should be noted that not all FOMC officials agreed with the decision, Boston Fed President Eric Rosengren and Kansas Fed President Esther George voted to keep interest rates without changes
Read more