The Federal Reserve on Wednesday announced its second interest rate cut of this year as policymakers moved to support the labor market despite inflation remaining above the central bank’s target.
Fed policymakers voted to lower the benchmark federal funds rate by 25 basis points to a new range of 3.75% to 4%. The move follows a rate cut of that size in September, which was the first reduction this year.
Policymakers have been monitoring economic data, which has shown a slowdown in the labor market in recent months as businesses grapple with changes in trade and immigration. Meanwhile, inflation has trended higher as tariff-related price hikes filter into government data.
Those trends have put the Fed in a bind as it looks to fulfill its dual mandate goals of stable prices in line with the 2% long-run target for inflation as well as promoting maximum employment.
The Federal Open Market Committee (FOMC), which guides the central bank’s monetary policy moves, noted in its announcement that there are risks to both sides of its dual mandate as job gains have slowed this year, with the unemployment rate edging higher but remaining relatively low, while inflation has increased and remains elevated.
This is a developing story. Please check back for updates.
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