FOMC meeting comes amid incomplete data reporting due to government shutdown
The United States Federal Open Market Committee (FOMC) meeting concluded today with the decision to lower benchmark interest rates by a quarter per centage point to a benchmark range between 3.75 and 4 per cent.
Markets had priced in Wednesday's cut as a near-certainty, especially following an inflation print for September that came in slightly cooler than expected.
"Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments," a press release announcing the decision reads. "Inflation has moved up since earlier in the year and remains somewhat elevated."
Beneath that certainty, however, there has been debate over the future path of interest rates in the United States, with trade uncertainty, political intervention, and a new composition of the FOMC all weighing on forward expectations. At the September FOMC meeting, recently appointed governor Stephen Miran dissented in favour of a 50 basis point cut, which aligns more closely with what President Donald Trump has called for. Governor Miran dissented in favour of a 0.50 per cent cut once again at this meeting.
There has been some concern raised about the US labour market, though the ongoing government shutdown has meant detailed jobs numbers have not been published.
"In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the release reads. "The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."
