U.S Federal Reserve cuts interest rates first time in over a decade

federal reserve

The U.S Federal Reserve has now cut interest rate for the world’s largest economy, the first time in over a decade.

Federal Reserve issued a statement saying “the Committee decided to lower the target range for the federal funds rate to 2 to 2-1/4 percent,”

“This action supports the Committee’s view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain,” the statement said.

The apex bank said its decision was based o the “information received since the Federal Open Market Committee met in June indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.

While “Growth of household spending has picked up from earlier in the year, growth of business fixed investment has been soft. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.”

“Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability,” the statement said.