The Fed Just Made a Major Reversal

Cuts key interest rate by a quarter-point
By Kate Seamons,  Newser Staff
Posted Jul 31, 2019 5:33 AM CDT
Updated Jul 31, 2019 1:22 PM CDT
In this July 10, 2019, file photo, Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee on Capitol Hill in Washington.   (AP Photo/Susan Walsh, File)

(Newser) – As expected, the Federal Reserve on Wednesday cut its key interest rate for the first time since December 2008. The benchmark short-term rate was lowered by a quarter-point to a range of 2% to 2.25%, the AP reports. The Fed also repeated a pledge to "act as appropriate to sustain the expansion"—wording that the financial markets have interpreted as a signal for possible future rate cuts. Read on for coverage from earlier Wednesday, in advance of the rate cut being confirmed:

  • It comes as an "insurance cut," explains the New York Times, meaning one made to sustain the growth we're currently experiencing. The Times views it as fueled by question marks surrounding global growth and persistently low inflation, "because both pose major threats to the health of the economy at a time when the central bank has limited ammunition to fight off a downturn."

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