Federal Reserve Banks of America announced that it cut the interest rates by 50 basis points which banks provide to its consumers and businesses. Other things of loans like mortgages and credit cards will also be cut down by half a percentage point.
The Central Bank Federal Open Market Committee decided on Wednesday that it cut the interest rate to 50 basis points after so much speculation to soften the job and inflation size.
Federal Open Market Committee Will Further Reduce the Interest Rate
Federal Open Market Committee wanted to balance the inflation and job rates so The FOMC members cast 11- 1 votes in deduction rates. Governor Bowman was the one who voted against it.
Fed cut the interest rate to a range between 4.75% – 5%. And they decided to lend the money to banks, mortgages, auto loans, and credit cards.
In addition to this reduction, the federal cut the interest rates by full percentage by the end of 2025 and a half point in 2026.
FOMC officials raised the unemployment rate this year to 4.4% from the core 4% projection last update in June. It lowered the inflation outlook to 2.3% from 2.6% last year.
The Announcement of the Fed Interest Cut Rates Slow Down the Stock Market
The stock market slightly ended lower on the day after the federal cut rate. Other notable key economic indicators suggest the gross domestic product has been rising steadily and the Atlanta Fed is tracking 3% growth in the third quarter based on the continuing strength in consumer spending.
