The Federal Reserve announced on 30th October 2019 an interest rate reduction of 0.25%
This will lower the Federal funds target rate to between 1.5% -1.75%.
It was also reported earlier Wednesday that third quarter GDP growth rose at a better than expected 1.9% annual rate.
The Fed signalled a pause – the FOMC statement removes comment to ‘act as appropriate’ when talking about rate-cut flexibility.
Jerome Powell has previously described the easing as a ‘mid-cycle adjustment’ to guard against possible downside risks. Economists said the U.S. central bank did not want investors to think that rates were headed back to zero.
These interest rate reductions are seen as an insurance policy move against further downside risks.