Weeks of speculation were put to rest Wednesday (July 30) when the Federal Reserve announced a quarter-percent interest rate cut in its mid-year assessment of U.S. economic health.
UPI reported that the Federal Open Market Committee lowered the benchmark rates first the first time in a decade — to 2% to 2.25%. The FOMC cited the “implications of global developments for the economic outlook as well as muted inflation pressures” as its reasoning for the cut. The committee said growth is moderate and the labor market is strong.
Since the end of 2015, the Fed has made a series of nine increases to the federal funds rate from near zero, where it remained for years following the Great Recession to spur growth. The last increase came in December, to put rates at the current 2.25% to 2.5% range.
The last time the Fed cut rates was during the financial crisis in December 2008 -– when they were cut by nearly a full point to the lowest point in history -– 3,879 days ago.
The Fed has held the interest rate steady in its prior announcements this year after raising the interest rate four times in 2018.
Fed Chairman Jerome Powell hinted this month a rate cut may be coming, when he testified before the House financial services committee that the positive June jobs report hadn’t altered the agency’s economic outlook.
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