Oct 30, 2019

Federal Reserve announces third consecutive rate cut

Fed chair Jerome Powell at a press conference in September. Photo: Alex Wong/Getty Images.

The Federal Reserve cut its benchmark interest rate Wednesday for the third consecutive time this year, by a quarter point, to between 1.5% and 1.75%. Chairman Jerome Powell hinted the central bank would hold off on further rate cuts.

Why it matters: The Fed has set out to shield the economy from risks, including the U.S.-China trade war. But the likely pause in rate cuts means officials think the economy has enough insulation for now.

Between the lines: The new benchmark rate could be the prevailing one for the foreseeable future.

  • "We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook," Powell said at a press conference following the rate decision.
  • The Fed also removed a phrase that's been associated with interest rate cuts from its closely watched policy statement — "act as appropriate to sustain the expansion" — which market-watchers interpreted to mean that the central bank could put rate cuts on pause.

What they're saying: The Fed noted in the statement that economic activity "has been rising at a moderate rate," job gains have been "solid, on average, in recent months, and the unemployment rate has remained low."

  • Yes, but: While consumer spending is strong, "business fixed investment and exports remain weak," the central bank said.
  • The Fed also noted that inflation remained below its 2% target rate.

Two Fed officials voted against the rate cut — down from the three dissenters in September.

Go deeper: Fed’s Kashkari pushes back against Trump pressure

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 5,410,228 — Total deaths: 345,105 — Total recoveries — 2,169,005Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 1,643,499 — Total deaths: 97,722 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: White House announces travel restrictions on Brazil, coronavirus hotspot in Southern Hemisphere Over 100 coronavirus cases in Germany tied to single day of church services — Boris Johnson backs top aide amid reports that he broke U.K. lockdown while exhibiting symptoms.
  4. Public health: Officials are urging Americans to wear masks headed into Memorial Day weekend Report finds "little evidence" coronavirus under control in most statesHurricanes, wildfires, the flu could strain COVID-19 response
  5. Economy: White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Public employees brace for layoffs.
  6. Federal government: Trump attacks a Columbia University study that suggests earlier lockdown could have saved 36,000 American lives.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 1 hour ago - Politics & Policy

U.S. coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios. This graphic includes "probable deaths" that New York City began reporting on April 14.

The CDC is warning of potentially "aggressive rodent behavior" amid a rise in reports of rat activity in several areas, as the animals search further for food while Americans stay home more during the coronavirus pandemic.

By the numbers: More than 97,700 people have died from COVID-19 and over 1.6 million have tested positive in the U.S. Over 366,700 Americans have recovered and more than 14.1 million tests have been conducted.

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

Japan's economy minister outlined plans on Monday to end the nationwide state of emergency as the number of new novel coronavirus cases continues to decline to fewer than 50 a day, per Bloomberg. Japan has reported 16,550 cases and 820 deaths.

By the numbers: Over 5.4 million people have tested positive for the virus as of Monday, and more than 2.1 million have recovered. The U.S. has reported the most cases in the world (over 1.6 million from 13.7 million tests). The U.K. is reporting over 36,800 deaths from the coronavirus — the most fatalities outside the U.S.