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The US Federal Reserve lowered its key rate for Wednesday for the first time since 2008, reflecting its concern for the global economic outlook and the low inflation rate.
President Donald Trump has often criticized the Fed and repeatedly called for a "sharp" reduction in interest rates.
The interest rate was cut by a quarter point between 2% and 2.25%, according to a statement from the US Monetary Reserve Committee.
The reserve raised interest rates four times (quarterly) last year, but now considers that weak global growth and low inflation require a more flexible monetary policy.
Despite this change in monetary direction, the characterization of economic activity by the Monetary Committee has not changed much from its recent meeting. Employment growth remains "solid" and investment growth is "low" and inflation remains "below the 2% target".
The Fed also decided to stop, two months earlier than planned, to reduce its balance sheet and abandon its Treasury bonds.
And while defending its independence, the Fed took the direction advocated by Trump.
Trump, seeking a second term, wants interest rates that encourage consumers, reduce debt and boost the Dow Jones index on Wall Street.
"The European Union and China will again reduce their interest rates and inject funds into their systems, which will facilitate the sale of their products," complained Trump Monday. "In the meantime, with very low inflation, our reserves are doing nothing and will certainly do less than that." He said.
The Federal Reserve's decision was not unanimous in the Monetary Committee. Two members preferred to keep interest rates unchanged.
This is the first time since Jerome Boyle badumed the presidency of this institution in early 2018 in which the Monetary Committee witnessed this split.
While inflation has stabilized at 1.4%, the US economy is robust at 2.1% in the second quarter of 2019 and unemployment is at its lowest level in half a year. century (3.7%).
AFP
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