Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
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