US Fed cuts interest rates

Washington, September 19

The US Federal Reserve cut interest rates again on Wednesday to help sustain a record-long economic expansion but signalled a higher bar to further reductions in borrowing costs, eliciting a fast and sharp rebuke from President Donald Trump.

Describing the US economic outlook as “favourable,” Fed Chair Jerome Powell said the rate cut was designed “to provide insurance against ongoing risks”, including weak global growth and resurgent trade tensions.

“If the economy does turn down, then a more extensive sequence of rate cuts could be appropriate,” Powell said in a news conference after the Fed announced it had lowered its benchmark overnight lending rate by a quarter of a percentage point to a range of 1.75% to 2.00%. It was the second Fed rate cut this year.

He said the US labour market was strong and inflation was likely to return to the Fed’s 2% annual goal. — Reuters