Why Fed Cut Interest Rates Today for the First Time Since 2008

Unemployment is still at historic lows, the economic expansion in the U.S. is at record length, and consumers are spending money, so why did the Fed lower interest rates?  This is called an “insurance cut.”  The central bank wants the economy to keep moving forward.  The Fed’s main jobs are to maintain maximum employment and stabilize inflation.  Lately, there has been uncertainty around global growth and inflation hasn’t moved high enough to continue to raise rates.  This move of lowering interest rates by 0.25 (25 basis points) gets policy makers ahead of a global economic slowdown and keeps the U.S. economy chugging along.  It’s not necessarily a trend, more of a preemptive policy move and the Fed will monitor information as it contemplates the future path of rate changes. 

Source: https://www.nytimes.com/interactive/2019/07/31/business/economy/federal-reserve-interest-rates.html

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