?The Federal Open Market Committee today announced a half percentage point reduction in the target range for the federal funds rate, bringing the range to one- to one-and-a-quarter percent,? stated Federal Reserve Chairman Jerome Powell.
Committee members chose to lower interest rates ?to help the U.S. economy keep strong in the face of new risks to the economic outlook.” The fundamentals, however, remain strong, according to Chair Powell.
“The unemployment rate has been near half-century lows for more than a year, the pace of job gains has been solid, and wages have been rising. These strong labor market conditions have underpinned solid household spending, which has been the key driver of economic growth over the past year,? Chair Powell said.
FOMC members convened earlier this year and felt the “prospects for continued economic growth remained favorable? and deemed the monetary policy ?well-positioned? to support this outlook. Since then, the spread of the Coronavirus has brought new challenges and risks, shares Chair Powell.
?The virus has afflicted many communities around the world, and our thoughts and prayers go out to those who have been harmed. The outbreak has also disrupted economic activity in many countries and prompted significant movement in financial markets,” Chair Powell said.
Committee members anticipate economic impacts, both home and abroad, to last for “some time.” United States industries affected by the virus include, but are not limited to: Travel and tourism. American businesses also remain concerned about sourcing materials globally.
