FOMC lowers federal funds rate by 25 basis points to 1.5% - 1.75% range as expected

  • FOMC cut the policy rate by 25 bps as expected.
  • The policy statement revealed the vote in favour of the policy was 8 to 2.
  • US Dollar Index edged higher ahead of FOMC Chairman Powell's presser. 

Following its 2-day meeting, the Federal Open Market Committee (FOMC) on Wednesday announced that it lowered the benchmark interest rate by 25 basis points to the target range of 1.75% - 2% in a widely expected decision. Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, is scheduled to deliver his comments on the monetary policy outlook in a press conference at 18:30 GMT. 

With the initial reaction, the US Dollar Index edged higher and was last up 0.07% on the day at 97.75.

Key takeaways from the policy statement (via Reuters)

"Vote in favour of the policy was 8 to 2, George and Rosengren wanted no change in rates."

"Will continue to monitor incoming information while assessing the appropriate path for the federal funds rate target range."

"Interest on excess reserves rate set at 1.55%, spread from the top of fed funds range maintained at 20 bp."

"Business fixed investment and exports remain weak."

"Labor market is strong, economic growth rising at a moderate rate."

"Job gains have been solid, unemployment has remained low."

"Household spending has been rising at a strong pace; inflation still running below."

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