US Fed Cuts Interest Rates By 25 Bps

Washington: The US Federal Reserve has slashed interest rates by 25 basis points amid cooling inflation and a weakening labour market, marking the second rate cut in this easing cycle. “Since earlier in the year, labour market conditions have generally eased, and the unemployment rate has moved up but remains low. Inflation has made progress toward the Committee’s 2 per cent objective but remains somewhat elevated,” the Federal Open Market Committee (FOMC), the central bank’s policy-setting body, said on Thursday in a statement.

In support of its goals, the committee decided to lower the target range for the federal funds rate by 0.25 percentage points to 4.5 per cent to 4.75 per cent, the statement said. The Fed’s latest decision came after a weak employment report, which showed that US employers added only 12,000 jobs in October, amid a cooling labour market.

This slowdown was exacerbated by the strike and impact of recent hurricanes, Xinhua news agency reported.

The latest report also revised down employment for August and September, to a gain of 78,000 and a gain of 223,000, respectively.