The US central bank announced on Wednesday it would slash the benchmark interest rate by a quarter of a percentage point, though this year’s third cut has long been criticised by President Donald Trump as too late and too little.
The cut decision made by the Federal Open Market Committee (FOMC), the monetary-policy organ affiliated to the Federal Reserve, was broadly in line with market expectations, but fell short of Trump’s demand of a larger cut. The benchmark interest rate after the adjustment is 3.5 per cent to 3.75 per cent, which remains a high burden on interest repayment.
The Fed decision could impact global financial markets by influencing international capital flows. Its decision is often followed by many central banks worldwide, including the Hong Kong Monetary Authority that implements a US dollar peg mechanism.
“Uncertainty about the economic outlook remains elevated. The committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months,” according to a release by the FOMC.
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Trump and US central bank chief bicker over bank renovation costs
Trump and US central bank chief bicker over bank renovation costs
