It’s been a decade since Feds did an Interest Rate slash to help the growing economy. Now, the Feds have repeated the same and announced the Federal Reserve interest rate cuts. The feds have taken this decision to guard the record-long economic expansion ahead of global financial risks. The financial experts well expected the move. Last time when Feds did the same, they slashed it to the near-zero back in 2008 to fight the recession. To prevent the disastrous effects of a growth slowdown in China and European countries, the federal reserve slashed the interest rates.
Not just the growth slowdown in China and European countries, but the uncertainty arose from President trump’s decision of trade war with China is also one of the reasons behind this interest rate cuts. According to the Federal Open Market Committee’s policy statement, in the light of Global economic outlook implications, the Federal Reserve committee decided slashing the target range of the federal funds rate. Unfortunately, the Federal Reserve has not shared the information if the rate-cutting campaign is going to continue or just a single time thing.
But the feds indicated that the Global slowdown and President Trump’s Trade War with China could be the primary reason behind this decision. With this decision, the Federal Reserve Dropped the target range of Federal Funds to 2-2.5 percent. The Federal Reserve was on the move of shrinking the balance sheet. But the Central bank has stopped the efforts to concentrate on keeping the American Economy in Moving state. The Fed Officials are expecting the economic expansion to continue, but are not sure about the economic outlook and worried about the uncertainties.