US Fed continues to ease monetary policy by lowering interest rates by 25 basis points

The US Federal Reserve has cut the policy interest rate by 25 basis points intending to support economic stability.The Federal Open Market Committee (FOMC) has lowered the target federal funds rate to between 4.5 and 4.75 percent. The action reflects the Fed's commitment to encouraging sustainable economic growth and bringing inflation closer to its long-term 2 percent target, said Fed Chairman Jerome Powell.

"Today the FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by a quarter of a percentage point," Powell said. "We continue to believe that with an appropriate recalibration of our policy stance, strength in the economy and labor market can be maintained and inflation can be brought down to 2 percent sustainably. We have also decided to continue to reduce our safety nets," he added.

Recent readings confirm a strong economic expansion, corrective with improvement in the labor market, steady with only some restraint. The unemployment rate has risen modestly and is still standing at relatively low percentages, thereby indicating a generally healthy job market in the United States. Inflation, though improved, has not reached the Fed's target yet, indicative that the central bank is trying to balance delicately when adjusting its monetary policy.

The committee emphasized that it remains focused on achieving maximum employment and stable, low inflation over the long term. Fed did acknowledge that there was uncertainty in the outlook and that there were risks to both its objectives of employment and inflation. The FOMC stressed it is going to continue to monitor labor market data, inflation pressures and international developments closely.

Looking ahead, the FOMC indicated that it will consider further adjustments to the federal funds rate in response to evolving economic conditions and risks to its dual mandate. The committee reaffirmed its commitment to returning inflation to its 2 percent objective and supporting maximum employment and repeated that it "will adjust the stance of monetary policy as appropriate to keep progress toward the Committee's goals on track.". This further extends the move of the Fed in the latest interest rate cut to instead favor a flexible, cautious mere boost toward ensuring a resilient U.S. economy amid changes in the economic landscape.