The Fed's policy-making body, the Federal Open Market Committee (FOMC), said the fundamentals of the U.S. economy remained strong but the virus "poses evolving risks to economic activity" and to support its goals of maximum employment and price stability, the target rate for the fed funds had been cut.
Echoing Chair Jerome Powell's statement on Feb. 28, the FOMC added it was closely monitoring developments and their implications for the economic outlook and it will "use our tools and act as appropriate to support the economy."
The FOMC, which was unanimous in its decision, was not scheduled to meet until March 18.
It is the Fed's fourth rate cut since it changed course in July 2019 in light of weakness in the global economy and then cut its rate three times by a total of 75 basis points, ending in October.
Since then the Fed has kept its rate steady but including today's cut, the rate has been cut by a total of 125 basis points since July 2019.
The Board of Governors of the Federal Reserve System issued the following statement by its policy-making body, the Federal Open Market Committee (FOMC):
"The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent. The Committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles."
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