The Federal Reserve lowered its key interest rate by a quarter of a percentage point on Wednesday, setting the new target range at 3.75% to 4%.
In its FOMC statement, the Fed said the U.S. economy continues to expand at a “moderate pace,” though hiring has cooled and unemployment has edged higher. Inflation has risen slightly since earlier in the year and “remains somewhat elevated.”
Officials said the rate cut reflects a “shift in the balance of risks,” noting that downside risks to employment have increased in recent months. The Fed also announced plans to end its balance sheet reduction program on December 1, signaling a turn toward looser monetary policy after two years of tightening.
The decision was not unanimous. Two members dissented, one favoring a larger half-point cut and another preferring no change at all.
