The Federal Reserve announced on October 30, 2019 its third interest rate cut this year. Financial markets anticipated the decision. This move takes the Fed’s benchmark overnight lending rate down by 0.25% to a target range of 1.50% to 1.75%.
The Fed has been explaining their action this year as a preemptive move on their part. “We took this step to keep the economy strong,” Fed Chairman Jerome Powell said in September upon announcing the prior rate decrease.
Powell downplayed further rate decreases to come in the near future. Powell said, “The current stance of policy is likely to remain appropriate as long as incoming information about the economy remains broadly consistent” with the Fed’s outlook for moderate growth.
The Fed decision was not unanimous by the voting members. Two of the 10 voting members wanted to hold rates steady. These members would prefer to lower rates only if alarming economic weakness arrives, which broadly is not happening at this time.
Our team will continue to stay abreast of interest rates and the markets. We will continue to help our clients position their portfolios for their unique financial goals within the context of broad economic developments like these.