Federal Reserve cuts rates by 50bp Bowman dissents

(Sharecast News) - The US central bank surprised markets with a half percentage point interest rate cut. However, rate-setters in Washington D.C. also emphasised that they would not necessarily continue to loosen policy at that same pace.

The target range for the federal funds rate was lowered by 50 basis points to 4.75-5.0%.

In his post meeting press conference, Federal Reserve president, Jerome Powell, emphasised that the jobs market remained near so-called "full employment" and as such now was the time to butrress it, not once it had weakened.

Hiring nevertheless had clearly slowed, Powell said.

So while he described the jobs market as "solid" the risks had increased even as those for inflation were now more balanced.

Indeed, in its policy statement, the Federal Open Market Committee said it now had "greater confidence that inflation is moving sustainably toward 2 percent".

Yet the economic outlook was "uncertain".

For the first time since 2005, one FOMC member, governor Michele Bowman, dissented, voting instead for a 25bp cut.