Today, what we’ve expected for weeks came to fruition. The Federal Reserve met, and they lowered interest rates. The new target range is 2 to 2.25 percent.
Analysts expected this move at least since the last meeting of the Fed back in June. Rhetoric has increasingly suggested that changes were coming. The Fed disliked stagnant interest rates and rising trade tensions, and President Donald Trump applied external pressure for them to lower rates.
Now, everything is official. They officially lowered interested rates. As a result, you should expect to see lower rates on credit cards and auto and home loans and, in theory, increased economic activity. Here is some of the Fed’s explanation in their statement today.
“Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 2 to 2-1/4 percent.”
“This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain.”
Fed Chairman Powell will explain more in his press conference this afternoon. For now, we’ll need to wait and see how this move impacts the economy in the long term.