Grants Interest Rate Observer Founder and Editor Jim Grant discusses the market's reaction to Trump's election win, how the US Federal Reserve is handling the economy, and shares his market outlook.
The Federal Reserve on Thursday announced its second straight interest rate cut, lowering its benchmark interest rate by 25 basis points amid economic data showing signs that inflation and the labor market are slowing.
With a cut of 25 basis points, the benchmark federal funds rate will be in the range of 4.5% to 4.75%.
The Fed's move follows a larger-than-usual cut of 50 basis points at its September meeting, which was the first rate cut since March 2020 and lowered interest rates from a range of 5.25% to 5.5% – which was the highest level since 2020. 2001.
The Federal Open Market Committee (FOMC), which is the Fed's policymaking body, noted that “labor market conditions have generally eased, and the unemployment rate has increased but remains low. Inflation has made progress toward the Committee's goal of 2 percent but remains high .”
Policymakers said in their announcement that they were “mindful of the risks both sides face from their dual mandate” – namely to encourage maximum employment and stable prices. All FOMC members voted in favor of lowering interest rates.
This is a developing story. Please check back for updates.