The interest rate in the USA is now at 4.00–4.25 percent.
In its decision, the Fed points out that job growth in the USA has decreased and that unemployment has increased somewhat. At the same time, inflation has risen and is somewhat elevated.
In July, it was the case that most members saw inflation as the greatest risk, now one sees more clearly downward risks in the labor market. When one now has risks on both sides, then one does not think that one needs to have a equally restrictive interest rate anymore, says Elisabet Kopelman, USA economist at the major bank SEB.
It's actually not about the Fed having to boost the economy, but rather about lifting one's foot from the brake, she continues.
Further cuts
The central bank is sending signals that there will be two more cuts this year. Next year, only one cut in the interest rate is expected, writes the news agency AP.
After the announcement of the cut, the stock prices rose slightly before falling back.
The Fed was almost unanimous in its decision to cut 0.25 percentage points. Only the recently appointed member Stephen Miran, who was nominated by the President of the USA Donald Trump, wanted a double cut.
Miran is an economic advisor in the White House, a post he is on leave from, writes Bloomberg.
Hard pressure
Fed chief Jerome Powell has been under hard pressure from Donald Trump, who has called for more interest rate cuts and been very aggressive.
Trump has on numerous occasions accused Powell of being far too slow in cutting the interest rate.
Last year, the Fed cut the interest rate on three occasions. Last September, it was cut by 0.50 percentage points, in November by 0.25 percentage points and in December by 0.25 percentage points.
