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Federal Reserve Chairman Jerome Powell speaks at a press conference in June. Photo: Ting Shen/Xinhua via Getty Images

In its biggest decision since 2015, the Federal Reserve said on Wednesday it would slash its benchmark interest rate by a quarter point, as expected, in an effort to extend the economic boom and boost weak inflation.

Between the lines: Speaking to reporters at a press conference following the decision, Fed Chair Jerome Powell re-adjusted the market‘s expectations of a series of more rate cuts by the end of the year. Stocks dropped sharply during the press conference, but after regaining some ground, the Dow finished down more than 300 points, while the S&P fell 1.19% and the Nasdaq dropped 1.1%.

The Fed also announced it would end the runoff of its multi-trillion balance sheet on Thursday — 2 months earlier than expected.

Details:

  • Echoing comments from recent members of the Fed in recent weeks, the central bank noted in its policy statement that its decision to reduce rates came "in light of the implications of global developments for the economic outlook" — namely the trade war and faltering economies around the world.
  • Powell spent most of the press conference trying not to imply that he was committed to this as a "one-and-done" action or a series of rate cuts.
  • Traders trimmed bets that the Fed would cut multiple times this year.

President Trump — who, for the past year, has broken presidential norms by consistently calling on the Fed for looser monetary policy — said Powell "let us down" (it's unclear who "us" refers to) in not saying this was "the beginning of a lengthy and aggressive rate-cutting cycle."

  • Powell, during the press conference, reiterated the Fed's political independence, despite the fact that Trump has so far gotten everything he's wanted from the central bank.

The bottom line: While previous Fed regimes have cut rates when the economy was not in the throes of a recession, it's still a rare move — one that will likely be a legacy-shaping milestone in Jerome Powell's tenure as Fed chairman.

Go deeper: Why the Fed wants higher inflation

Go deeper

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

How cutting GOP corporate cash could backfire

Illustration: Aïda Amer/Axios

Companies pulling back on political donations, particularly to members of Congress who voted against certifying President Biden's election win, could inadvertently push Republicans to embrace their party's rightward fringe.

Why it matters: Scores of corporate PACs have paused, scaled back or entirely abandoned their political giving programs. While designed to distance those companies from events that coincided with this month's deadly siege on the U.S. Capitol, research suggests the moves could actually empower the far-right.

8 hours ago - Politics & Policy

Scoop: Kaine, Collins pitch Senate colleagues on censuring Trump

Sen. Tim Kaine speaks with Sen. Susan Collins. Photo: Andrew Harnik/AP via Getty Images

Sens. Tim Kaine and Susan Collins are privately pitching their colleagues on a bipartisan resolution censuring former President Trump, three sources familiar with the discussions tell Axios.

Why it matters: Senators are looking for a way to condemn Trump on the record as it becomes increasingly unlikely Democrats will obtain the 17 Republican votes needed to gain a conviction in his second impeachment.