WASHINGTON–As many expected, the Federal Open Market Committee concluded its meeting here by cutting by 25 basis points the target range for the federal funds rate to 1.50% to 1.75%.
In announcing its decision, the Fed said September data indicate the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low, the FOMC added.
“Although household spending has been rising at a strong pace, business fixed investment and exports remain weak,” the FOMC said in a statement. “On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.”
The FOMC said the rate cut supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2% objective are the most likely outcomes, “but uncertainties about this outlook remain.”
The Committee added it will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles. Voting against this action were: Esther L. George and Eric S. Rosengren, who preferred at this meeting 1.75% to 2%.