Fed Cuts Interest Rate, Citing Concerns over Inflation and Global Slowdown

July 31, 2019

The Federal Reserve cut the benchmark interest rate by one quarter-point, hoping to avoid an economic slowdown. The central bank views the cut as a preventative measure, based not on where the economy is today, but where it may be going. It views the current economy as having “moderate” growth and a “strong” labor market, but expressed concerns about the “implications of global developments for the economic outlook as well as muted inflation pressures.”

While some economists had been expecting a larger half-point cut, the Fed opted for a more moderate option. Though they did acknowledge the possibility of future cuts, committing to act as appropriate to sustain the current economic expansion.

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