- Federal Reserve cuts benchmark overnight lending rate to a range of 1.75% to 2.00% on a 7-3 vote
- It says the U.S. economy continues growing at a ‘moderate’ rate and the labor market ‘remains strong’
- But it says it was cutting rates ‘in light of the implications of global developments for the economic outlook’
- Fed cited ‘uncertainties’ about the outlook and pledged to ‘act as appropriate’ to sustain the expansion
- ‘No “guts,” no sense, no vision,’ blasted President Trump as he mocked Fed chairman Jay Powell for making moves that are too modest
The U.S. Federal Reserve cut interest rates by a quarter of a percentage point for the second time this year on Wednesday in a widely expected move meant to sustain a decade-long economic expansion, but gave mixed signals about what may happen next.
President Donald Trump, traveling in California, quickly made it known that he believes the move is too small and too late to help the U.S. economy grow in line with its potential.
‘Jay Powell and the Federal Reserve Fail Again. No “guts,” no sense, no vision! A terrible communicator!’ Trump wrote on Twitter.
The central bank also widened the gap between the interest it pays banks on excess reserves and the top of its policy rate range, a step taken to smooth out problems in money markets that prompted a market intervention by the New York Fed this week.
Though the U.S. economy continues growing at a ‘moderate’ rate and the labor market ‘remains strong,’ the Fed said in its policy statement that it was cutting rates ‘in light of the implications of global developments for the economic outlook as well as muted inflation pressures.’