us fed rate
In America, once again the US Reserve has announced a cut in interest rates. FOMC meeting was held on December 10, in which the Fed cut the policy rate by 0.25 percent. This is the third consecutive time that the Federal Reserve has announced cuts to boost the US economy. After this cut, interest rates in the US have come in the range of 3.50 to 3.75 percent. Which is at its lowest level in the last 3 years. However, FOMC Chairman and US Fed Chief Jerome Powell has also given strict indications for the future.
The Fed issued a statement after the meeting saying that the country’s economic activity is increasing very slowly. On the contrary, the continuous weakness in the employment market and the rising level of inflation have weighed heavily on policy making, as a result of which the funds rate has now come between 3.50 to 3.75 percent. Apart from this, the decision of further rate cut in the year 2026 will be taken after looking at the data.
There will be changes in the policy in future also
US Fed Chairman Jerome Powell, while cutting the policy rate by 25 basis points, said that this decision has been taken in view of the changing economic conditions and risks. How much and at what speed the interest rates will change in the future will depend on the upcoming data, economic projections and risks. He said that the Fed is ready to make further policy changes if needed to bring inflation down to the 2% target and protect employment. The Fed also indicated that it may purchase short-term Treasury bills if necessary to ensure adequate reserve balances in the banking system, thereby maintaining stable liquidity.
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This time there was a big difference of opinion among the members in the policy meeting. Stephen Miran called for a larger cut of half a percent, while Austan Goolsbee and Jeffrey Schmid were against any changes. Despite this, Jerome Powell and the majority members supported a 25 bps cut, which shows the Fed’s cautious and balanced stance. This is the first time since 2019 that the Fed’s decision came out with such a big difference of 9-3.